Analysing Anupam Rasayana Ltd IPO

With over 10 IPOs issued in Indian stock markets within just 3 months of 2021, it looks like the markets have got no chill. Today, we analyse Anupam Rasayan India Limited IPO. A well-known name in the specialty chemicals market, Anupam Rasayana holds great potential, thanks to its significant exports, increasing demand for its products, and an eco-friendly business approach.

If you aren’t familiar with an IPO and how to apply for one, consider reading All you need to know about IPOs and All you need to know about applying for IPOs to get a fair understanding

About Anupam Rasayan India Limited
Established in 1984, Anupam Rasayan Ltd is a leading specialty chemicals company, which manufactures products while focusing on sustainability. It is engaged in custom synthesis and the manufacturing of specialty chemicals involving complex chemistries and multi-step synthesis. Anupam Rasayan has a wide geographic reach across Europe, Japan, and the US, thanks to its long-term relationships with Sumitomo Chemical, Syngenta Asia Pacific, and UPL.

Business verticals of Anupam Rasayan India Ltd
Anupam Rasayan has 2 business verticals:

• Life science-related specialty chemicals
• Other specialty chemicals

Business vertical-wise revenue of Anupam Rasayan
90% of Anupam Rasayan’s revenue comes from the Life sciences specialty segment and the rest 10% comes from the Other specialty segment.

Life science-related specialty chemicals vertical
Under this vertical, Anupam Rasayana manufactures intermediates and ingredients for fungicides, insecticides, and herbicides consumed by agrochemical players. In addition, Anupam Rasayan is also involved in manufacturing ultraviolet protection and anti-bacterial ingredients for pharma and FMCG companies. Its portfolio of chemical intermediates has expanded from 25 to 41, thus increasing its product offerings.

Other speciality chemicals vertical
The products belonging to this vertical of Anupam Rasayan are used in pigments, polymer additives, and dyes. Despite contributing a mere 10% to the overall revenue of the company, this segment holds great potential to grow in the coming years, thanks to the increasing demand for pigments and dyes in the paint and textile industries.

Manufacturing and R&D facilities of Anupam Rasayan
As of 31st Dec 2020, Anupam Rasayan operated via 6 multi-purpose manufacturing facilities in:

• 4 at Sachin, Surat
• 2 at Jhagadia, Bharuch

The company has a dedicated in-house R&D facility recognized by The Department of Scientific & Industrial Research.

Raw materials of Anupam Rasayan
20% to 25% of Anupam Rasayan’s key raw materials: benzene derivatives and phenol, are imported.

Products of Anupam Rasayan India Limited

• Personal care
• Agrochemicals
• Pharmaceuticals
• Polymer additives
• Specialty pigments

About Anupam Rasayan IPO

• The Rs 760 cr-worth Anupam Rasayan IPO opens on 12th Mar and closes on 16th Mar
• The price band of the IPO is set at Rs 553 — Rs 555 per share
• The issue comprises entirely of fresh issuance of shares
• The post-issue implied market capital of Anupam Rasayana is expected to be Rs 5,527 — Rs 5,544 cr
• The bid lot size is 27 shares and multiples thereof
• Shares reserved for employees would be offered a discount of Rs 55 apiece
• Anupam Rasayan will list its shares on BSE and NSE

Subscription eligibility

• Up to 50% of the IPO is reserved for qualified institutional buyers (QIBs)
• 35% of the IPO is set aside for retail investors
• 15% of the issue is reserved for non-institutional investors
• Up to 2,20,000 shares worth Rs 11 cr are reserved for eligible employees

Utilisation of IPO proceeds
The funds raised via Anupam Rasayan IPO would be utilised to:

• Make repayment or prepayment of debts
• For general corporate purposes

Book running lead managers and registrar to the IPO
While the book running lead managers to the issue are Ambit, Axis Capital, JM Financial, and IIFL Securities, KFin Technologies Private Ltd. is the registrar to the IPO.

Valuation of Anupam Rasayan Ltd
Anupam Rasayan’s PE based on 9 mth-ended FY 2021 EPS is 69, making the issue fully priced. On the other hand, the company is valued at 36.1X FY 2023 earnings at the higher price band of Rs 555 apiece.

Continue to read peer comparison, financials, and prospects of Anupam Rasayan India Ltd here.