Business: Anupam Rasayan India Limited® is one of the leading companies engaged in the custom synthesis and manufacturing of specialty chemicals in India. With our customers at the heart of everything we do, our focus is to manufacture products with sustainability using our continuous process technology through flow chemistry and photo chemistry, greater R&D and engineering capabilities to deliver values for our customers for their complex and multi-step synthesis projects.
The company, based in Surat, commenced its operations as a partnership firm in April 1984 and was incorporated in September 2003. It is one of the leading manufacturers of specialty chemicals in India. Its business has two verticals –
- Life science related speciality chemicals that are used in agrochemicals, personal care and pharmaceutical sector (majority revenue ~ 95% in 2019-20)
- Other speciality chemicals i.e., pigment & dyes, polymer additives, etc.
The company operates six multi-purpose manufacturing facilities in Gujarat, with four facilities located at Surat and two located at Jhagadia, having a combined aggregate installed capacity of around 23,396 metric tonnes. In addition to manufacturing chemicals, the company is also engaged in its custom synthesis.
IPO Detail and Timelines:
- The Specialty chemicals sector (CAGR around 11%) which is booming after the COVID.
- Consistent track record of financial performance.
- Company to benefit from huge expansion plans in last 3 yrs.
- Bright outlook form Speciality Chemical Business dues to China plus one and Govt’s PLI Scheme
- Strong 45% Revenue Growth in this year, but may not be there in future years
- Annualizing FY21-9M earnings and attributing it to fully diluted post-issue equity, the P/E comes around 86.45, as against industry composite P/E ratio of 42.81. Thus, the issue appears to be aggressively priced.
- The company depends on manufacturing facilities which are subject to manufacturing risks.
- Over 85% of revenue comes from its top 10 customers. Loss of any of those customers could impact its business to a large extent
- Recent preferential allotment in 2020 are avg around: Rs 240/- but IPO price is almost double.
<Subscribe or Avoid>
Short Term / Listing Gains: (high risk bet) could be short term gain any where around 20-40%, Book profit and Exit
Gray Market Premium(heard): 260-270- as of 12th March 2021.
Long Term: No recommendation for long term.