IPO analysis: Anupam Rasayan India

Date:03-11-2021

Anupam Rasayan is one of the leading companies engaged in the custom synthesis and manufacturing of speciality chemicals in India. Anupam Rasayan listing will happen on BSE & NSE. The issue opens on 12 Mar 2021 and closes Date 16 Mar 2021. The Price Band is Rs 553-Rs 555 and the Market Lot size is if 27 shares and the multiple thereof. The Issue Size is Rs 760 cr and Total no of shares offered are 13,693,693.  

Anupam Rasayan has two business verticals:  

1) Life sciences (90% of the revenue), which caters to agrochemical, personal care and pharma

2) Other speciality chemicals (10% of the revenue), which includes pigment & dyes, polymer additives, etc.

Anupam Rasayan’s Exports contribute over 60% of ARL’s total business, while the rest comes from the domestic market. The company operates 6 manufacturing facilities in Gujarat with an aggregate installed capacity of 23,438 metric tonnes (MT). ARL has a dedicated in-house R&D facility recognized by The Department of Scientific & Industrial Research. Benzene derivates and phenol are the key raw materials used, of which 20-25% are imported.

Strengths: 

Global footprint in countries like Singapore, USA, Europe, Japan, etc. 

6 automated and strategically located manufacturing facilities. 

Consistent track record of financial performance. 

Diversified and customised product portfolio with a strong supply chain. 

Experienced promoters and strong management team. 

Financials 

For the first six months of the financial year 2020-21, Anupam Rasayan reported a profit of Rs 26.48 crore compared to Rs 21.74 crore, a year ago. The revenue for the period increased 51.5 per cent on a YoY basis to Rs 355.13 crore. The company primarily caters to agrochemical, personal care, and pharmaceutical sectors, which account for over 95 per cent of its revenue. From FY18 to FY20, the company’s total revenue grew by 24.29 per cent annually while EBITDA for FY20 stood at Rs 134.89 crore.

Valuation & recommendation  

Anupam Rasayan is one of the leading companies in India, which is engaged in the custom synthesis and manufacturing of speciality chemicals. It has reported strong revenue growth in the last 3 years and 9 months. It continues to focus on custom synthesis and manufacturing by developing innovative processes and value engineering. The company expands its business by capitalising on industry opportunities and organic & inorganic growth. It diversifies its product portfolio and expands chemistry expertise. It continues to focus on cost efficiency and improving productivity. The company compares itself with other listed counterparts such as PI Industries, Navin Fluorine International, Astec Lifesciences, and SRF.

About the company 

Incorporated in 1984, Anupam Rasayan is one of the leading companies engaged in the cotton synthesis and manufacturing of speciality chemicals in India. It has two distinct business verticals. One is life science-related speciality chemicals comprising products related to agrochemicals, personal care, and pharmaceuticals, while the other consist of specialty chemicals, comprising speciality pigment & dyes, and polymer additives. It has developed strong and long-term relationships with various multinational corporations, including Syngenta Asia Pacific Pte Ltd, Sumitomo Chemical Company Limited and UPL Limited that has helped the company to expand its product offerings and geographic reach across Europe, Japan, the United States and India. It has been manufacturing products for certain customers for over 10 years. In the six-month period ended September 30, 2020, it had manufactured products for over 45 domestic and international customers, including 15 multinational companies. The Government of India has also recognised the company as a three-star export house. Currently, the firm operates 6 multi-purpose manufacturing facilities in Gujarat (India) with four facilities located in Sachin and Surat while the other two in Jhagadia and Bharuch with an aggregate installed capacity of 23,438 MT.