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The 11th IPO so far in calendar year 2021 is here!
The Rs 760-crore IPO of speciality chemicals company Anupam Rasayan opened for subscription today and the issue closes on 16th March.
Let's talk about 10 things you must know before subscribing.
Also Read : How to Apply for IPO online (step by step guide)
Incorporated in 1984, Anupam Rasayan is one of the leading companies engaged in the cotton synthesis and manufacturing of specialty chemicals in India. The business has 2 verticals;
1. Life Science related specialty chemicals that are used in agrochemicals, personal care, and pharmaceutical sector and
2. Other specialty chemicals i.e. pigment & dyes, polymer additives, etc.
The company has a strong long-term relationship with many multinational companies like Syngenta Asia Pacific Pte Ltd, Sumitomo Chemical Company Ltd, and UPL Limited to expand geographical reach across countries like United States, Europe, Japan, and India.
2) IPO Details:
The company will sell 1.37 crore shares in a fresh issue, amounting to about 16% of the paid-up equity, through the IPO at Rs 553-555 apiece. At the upper price band, Anupam Rasayan will be valued at Rs 5,545 crore. Promoter shareholding after the IPO will fall to 65.40% from 75.80%.
Ahead of the IPO, the company had raised ₹225 crore from anchor investors, including foreign portfolio investors, domestic mutual funds, insurance companies and alternative investment funds.
IPO Date: Mar 12, 2021 - Mar 16, 2021
Face Value: ₹10 per equity share
IPO Price: ₹553 to ₹555 per equity share
Market Lot: 27 Shares
Listing At: BSE, NSE
Finalisation of Basis of Allotment: Mar 19, 2021
Initiation of Refunds: Mar 22, 2021
Credit of Shares to Demat Acct: Mar 23, 2021
IPO Shares Listing Date: Mar 24, 2021
Read more: Opening an Account with RBI for Investing?
Surat-based Anupam Rasayan commenced business as a partnership in 1984 to manufacture and sell chemicals. It was converted into a public limited company in September 2003. Over the years, it expanded to undertake custom synthesis and manufacturing of life science-related and other specialty chemicals.
Its custom synthesis and manufacturing agreements are long-term pacts of two and five years, with certain contracts automatically renewed for a year at a time. Anupam Rasayan has developed long-term relationships with various multinational corporations, including Syngenta Asia Pacific Pte., Sumitomo Chemical Co. and UPL Ltd.
The company has been manufacturing products for certain customers for more than 10 years. It has six multi-purpose manufacturing facilities in Gujarat, with four located in industrial estate at Sachin, close to Adani's Hazira Port. Two units are located in the industrial estate at Jhagadia. The facilities have a combined aggregate installed capacity of 23,396 metric tonnes, of which 6,726 metric tonnes was added in March last year.
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Anupam Rasayan’s revenue grew at an annualised rate of 24.29% in FY18-FY20, while Ebitda reported a CAGR of 34.6% during the period. That caused the Ebitda margin to expand from 21.8% in FY18 to 25.5% in FY20. Profit after tax grew at a compounded annual rate of 13.2% over FY18-20.
The company derives 68% of its revenue from exports—the key regions being Europe (35.97%), Singapore (17.23%), Japan (5.83%) and the U.S. (3.69%). India accounts for 31.95% of its revenue.
The issue price was fixed at Rs 553-555 per share. Considering TTM EPS of Rs 5.83 on a post-issue basis, the company is going to list at a P/E of 95.16X with a market-cap of Rs 5,544.5 crore.
6) Peer comparison:
Anupam Rasayan doesn’t specifically compete with any particular Indian company for the range of chemistries, scope of services, and applications and technologies it caters to. But financial resources, technology, R&D capability, greater market penetration, operations in diversified geographies and product portfolios are some of the factors investors should watch out for in specialty chemical makers.
7) Grey Market premium:
(As on Mar 12, 2021) The grey market premium of shares of Anupam Rasayan is at 260 Rs. or 46% up from the IPO price.
Proceeds from the issue will be primarily used to pay off Rs 563.70 crore in debt, including accrued interest. As on Jan. 31, 2021, Anupam Rasayan had total debt worth Rs 843.5 crore
- Diversified customer base across geographies and industries.
- In-house R&D team to foster product innovation.
- Diversified and customized product portfolio.
- Strategically located manufacturing facilities.
- Consistent financial performance track record.
- It has 6 manufacturing facilities out of which 4 are situated at Sachin and 2 are located at Jhagadia with an aggregated installed capacity of 23,438 MT.
- The company has incurred significant indebtedness, and an inability to comply with repayment and other covenants in their financing agreements could adversely affect their business, financial condition, cashflows and credit rating.
- It has had negative cashflows from operating activities in the past and a consequent net decrease in cash and cash equivalents in some of the recent years.
All recent IPOs in the chemicals space like Rossari Biotech Ltd. (July 2020), Chemcon Specialty Chemicals Ltd. (October 2020) and Heranba Industries Ltd. (March 2021) listed on bourses at a good premium. Investors are expecting the same with Anupam Rasayan.
Apply for 'one lot' for decent a listing gains as well as for the long term investment.
Research Analyst (SEBI Regd.)
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