Anupam Rasayan’s Grey Market Premium Shoots 58 Percent Ahead Of The IPO

Anupam Rasayan is preparing to launch a Rs 760 crore IPO containing fresh scrips on March 12, 2021. After the price band is announced, the share price surged 58 percent in the grey market and was trading at Rs 875.

If you are an interested investor, here are the key points to help you evaluate the IPO’s merit.

• Anupam Rasayan’s maiden public offer will float into the market on March 12, 2021. The bidding window will remain open for five days until March 16, 2021
• From the total offer size of Rs 760 crores, the issuer has reserved 50 percent for qualified institutional buyers (QIB), and no less than 35 percent for retail investors
• Anupam Rasayan IPO price is fixed in the band of Rs 553-555 per share
• Retail investors can bid for a minimum of 27 shares and increase their bidding size to 13 lots of 351 shares, amounting to Rs 194,805
• A total of 2.20 lakh shares, amounting to Rs 11 crores, reserved for eligible employees, who will receive a discount of Rs 55 per share if they apply
• The issue size contains fresh scrips. The company proposes to use the proceed for repayment and prepayment of borrowing and general corporate expenses
• Post-IPO, the company’s implied market capital pegged at Rs 5,527-5,544 crore

Anupam Rasayan is a strong player engaged in the custom synthesis and manufacturing of specialty chemicals in India. The company has two verticals in which it categorises its products. One is life science-related specialty chemicals, where it produces agrochemicals, personal care, and pharmaceuticals products. The second vertical comprises specialty products in pigment, dyes, and polymer additives.

The specialty chemical producer has a strong customer base across geographics in the US, Europe, and Japan.  In December 2020, the company was operating through six multi-purpose, vertically integrated manufacturing units in Gujarat.

On the financial front, the company registered a robust performance with growth in operating revenue and profit. Between FY2018-20, the company’s revenue grew at a CAGR of 24.29 percent annually, while EBITA for FY20 stood at Rs 134.89 crore. Despite the pandemic, the operational revenue of Anupam Rasayan grew by 45.03 percent to Rs 539.22 crores in the nine months between April and December 2020. Export of the company grew at a CAGR of 32.94 percent between FY18-20.

Anupam Rasayan has listed peers including PI industries, Navin Fluorine International Ltd., Astec Lifescience Ltd. with P/E of 695.72x, 32.20x, and 462.73x, respectively. It has a P/E ratio of 72.21 against an industry P/E ratio of 22.63. Anuman Rasayan’s shares priced at Rs 555, the annualised nine months FY21 EPS comes to 69, looks fully priced.

Conclusion

The company’s grey market price surged, indicating strong interest among investors. Its shares were trading at Rs 875 apiece or Rs 320 premium per share.  Keeping in mind the steady performance records and strong financials, market specialists suggested that investors subscribe to the Anupam Rasayan IPO offer.