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Issue Highlights
After its inception in 1984, Anupam Rasayan India has become one of the leading manufacturer of life science related specialty chemicals, and is all set to hit the capital markets.
The issue includes a reservation of up to 220,000 equity shares for subscription by eligible employees, at a discount of INE 55 per share.
Issue Details
Company Strengths
- Strong & long-term relationships with diversified customers across geographies with significant entry barriers
- Diversified and customized product portfolio with a strong supply chain
- Consistent track record of financial performance
- Core focus on process innovation through consistent R&D, value engineering and complex chemistries
Valuation
The company reported its EPS at 6.94, bringing the IPO valuation to a P/E of 79.97 at upper price band, against sector PE of 50.62. Though it is costlier, we are positive towards the issue based on its strong operations and global presence.
Issue Break-Up
Utilization of Funds
Background highlights of the company in brief
- Incorporated as a partnership firm in 1984 as a manufacturer of conventional products, Anupam Rasayan India Limited is one of the leading companies engaged in the custom synthesis and manufacturing of life science related specialty chemicals and other specialty chemicals in India.
- The company has two distinct business verticals: (i) Life science related specialty chemicals comprising products related to agrochemicals, personal care and pharmaceuticals, and (ii) Other specialty chemicals, comprising specialty pigment and dyes, and polymer additives.
- In FY 20 and in the 6M September 20, revenues from its life science related specialty chemicals vertical accounted for 95.37% and 92.48%, respectively, of its revenue from operations, while revenue from other specialty chemicals accounted for 4.63% and 7.52%, respectively, of its revenue from operations.
- The company has developed strong and long-term relationships with various multinational corporations, including, Syngenta Asia Pacific Pte. Ltd., Sumitomo Chemical Co. Ltd., and UPL Ltd. that has helped the company expand its product offerings and geographic reach across Europe, Japan, US and India.
- In the 6M September 20, the company manufactured products for over 45 domestic and international customer, including 15 multinational companies. The Government of India has also recognized the Company as a three star export house.
- The company has a dedicated in-house R&D facility and a pilot plant located at Sachin Unit – 6, which is equipped with laboratories engaged in process development, process innovation, new chemical screening and engineering, which assists in pursuing efficiencies from the initial conceptualization up to commercialization of a product.
- It has expanded its commercialized product portfolio from 25 products in FY 18 to 34 products in FY 20 and 36 products in the 6M September 20.
- As of September 30, 2020, the company operated six multi-purpose manufacturing facilities in Gujarat, with four facilities located at Sachin and two located at Jhagadia and an aggregate installed capacity of 23,438 MT.
- India’s specialty chemicals industry is expected to grow at a CAGR of approximately 10% to 11% over the next five years, due to rising demand from end-user industries, along with tight global supply on account of stringent environmental norms in China.
Briefing about directors & key managerial personnel
Briefing Financials
Balance Sheet
Statement of Profit and Loss
Ratios
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