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Anupam Rasayan IPO

Anupam Rasayan India Limited IPO

Anupam Rasayan India Limited is one of the leading companies engaged in the custom synthesis and manufacturing of speciality chemicals in India. The company started business as a partnership firm in 1984 as a manufacturer of conventional products.

Their business verticals are (i) life science-related speciality chemicals comprising products related to agrochemicals, personal care and pharmaceuticals, and (ii) other speciality chemicals, comprising speciality pigment and dyes, and polymer additives, company’s focus is to manufacture products with sustainability using our continuous process technology through flow chemistry and photochemistry, greater R&D and engineering capabilities to deliver values for customers for their complex and multi-step synthesis projects.

Green manufacturing and Green growth have always been at the top of the agenda, they have developed new eco-friendly, safer and novel routes for many products. Most of these products have been introduced on an exclusive basis for their customers.

Certain of their facilities are ISO 9001:2015 and ISO 14001:2015 certified companies with sound technology, environment consciousness, rich history of innovation through research, and a total commitment to excellence towards quality and sustainability.

They have six manufacturing sites that are located in the state of Gujarat: 4 sites are in Sachin, Surat and 2 states of art sites are in Jhagadia, Gujarat.

Product Portfolio:

The company’s products and services are organized primarily in the following segments:

  • The company manufactures agro intermediates and agro active ingredients for the agrochemicals industry which are used in the manufacture of insecticides, fungicides and herbicides.
  • For the personal care industry company provide anti-bacterial and ultraviolet protection intermediates and ingredients
  • In the pharmaceutical segment, companies focus on developing intermediates and ‘key starting materials’ for active pharmaceutical ingredients, and may also be used in material sciences and surface chemistry.

Strength of the company

  • Strong and long-term relationships with diversified customers across geographies with significant entry barriers
  •  The core focus on process innovation through consistent R&D, value engineering and complex chemistries
  • Diversified and customized product portfolio with a strong supply chain
  • Automated manufacturing facilities with a strong focus on the environment, sustainability, health and safety measure 
  • Consistent track record of financial performance
  •  Experienced promoters and a strong management team.

RISKS RELATING TO BUSINESS

  • Any unplanned or prolonged disruption of our manufacturing operations could materially and adversely affect business
  • The shortfall in the availability or quality of raw materials could have an adverse effect on business and results of operations
  • Any failure to raise additional financing could have an adverse effect on business
  • Any failure to comply with quality standards may adversely affect business
  • Reduction in demand for products could adversely affect our business, results of operations, financial condition and cash flows

IPO Details:

IPO Date March 12th, 2021 to March 16th, 2021
Issue Type Book Built Issue IPO
Issue Size Rs 760 Cr
Fresh Issue 13693693 Equity Shares aggregating to Rs 760 Cr
Offer for Sale NIL
Face Value Rs.10 per equity share
IPO Price Rs.553 to Rs.555 equity share
Min Order Quantity 27
Listing At BSE, NSE

IPO Objective:

The net proceeds of the Issue, i.e. Gross proceeds of the Issue less the Issue expenses (“Net Proceeds”) are proposed to be utilised in the following manner:

  • Repayment/prepayment of certain indebtedness availed by our Company (including accrued interest)
  • General corporate purposes

Financial Performance:

  FY2018 FY2019 FY2020 9M FY2021
Revenue 349.2 521.0 539.4 563.2
Expenses 299.4 455.2 468.0 496.4
Net income 40.1 49.3 51.2 47.1
Net margin (%) 11.5 9.5 9.5 8.4

Tentative Time Table:

Price Band announced 8 March 2021

IPO Opens on 12 March 2021

IPO Closes on 16 March 2021

IPO Allotment on 19 March 2021

Unblocking of ASBA 22 March 2021

Credit to Demat Accounts 23 March 2021

IPO Listing on 24 March 2021

Outlook :

Anupam Rasayan commenced operations in 1984 as a partnership firm with conventional products and now it makes speciality chemicals that involve multi-step synthesis and complex chemistries.

The company’s R&D team has successfully carried out the multi-step synthesis and scale-up for several new molecules in the area of life sciences related speciality chemicals and other speciality chemicals, and as a result, expanded its commercialized product portfolio from 25 products in Fiscal 2018 to 34 products in Fiscal 2020 and 36 products in the six months September 30, 2020

The company’s total revenue has increased at a CAGR of 24.29% from Rs 3,49.1 Cr in FY18 to Rs 5,39.3 Cr in FY20 and was Rs 2,37.5 Cr and Rs 3,73.5Cr in the six months ended September 30, 2019, and 2020, respectively.

EBITDA for the year 2018, 2019, 2020 and the six months ended September 30, 2019 and 2020 was Rs 74.5 Cr, Rs 92.1 Cr, Rs 1,34.8Cr, Rs 57.5 Cr, Rs 77.4 Cr, respectively while its EBITDA margin was 21.82%, 18.38%, 25.51%, 24.55% and 21.79%, respectively, for similar periods.

Its profit after tax and share of profit of associates was Rs 41.3 Cr, Rs 49.2Cr, Rs 52.9 Cr, Rs 21.7 Cr and Rs 26.4 Cr for Fiscals 2018, 2019, 2020 and the six months ended September 30, 2019, and 2020, respectively, while it’s PAT margin was 11.83%, 9.45%, 9.82%, 9.15% and 7.09%.

The company’s revenue and PAT have increased over the year but the margins have declined. At an upper price band of Rs 555 and EPS of 6.94, the PE comes out to be 79.97 which is higher than the PE of peers which is at 42.81. 

 Eyeing the growth of speciality chemical business we may expect to see a boost in revenue and profit. However, companies might have to work on the margin front. The company would be paying off debt by raising money from the IPO which will help in gaining the margins going further.

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