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Please refer to important disclosures at the end of this report
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Anupam Rasayan India Ltd. is a company engaged in the custom synthesis and
manufacturing of specialty chemicals in India. Company started its business as a
partnership firm in 1984 as a manufacturer of conventional products and have,
over the years, evolved into custom synthesis and manufacturing of life science
related specialty chemicals and other specialty chemicals, which involve multi-step
synthesis and complex technologies, for a diverse base of Indian and global
customers.
Positives: (a) Strong and long-term relationships with diversified customers across
geographies with significant entry barriers (b) Core focus on process innovation
through consistent research and development, value engineering and complex
chemistries (c) Diversified and customized product portfolio with a strong supply
chain (d) Automated manufacturing facility with strong focus on environment,
sustainability, health and safety measures (f) Consistent track record of financial
performance
Investment concerns: (a) Company has incurred significant indebtedness, and an
inability to comply with repayment could adversely affect business. (b) Experiencing
insufficient cash flows to meet required payments on debt and working capital
requirements, could adversely impact on operation. (d) It may become involved in
claims concerning intellectual property rights, and could suffer significant litigation
or related expenses in defending own intellectual property rights or defending
claims that we infringed the rights of others.
Outlook & Valuation: Company has strong and long-term relationships with
various multinational corporations, including, Syngenta Asia Pacific Pte. Ltd.,
Sumitomo Chemical Company Limited and UPL Limited. The company has posted
strong revenue growth of 24.3% CAGR between FY2018 to FY2020. Despite the
impact of the COVID-19 pandemic, company has posted revenue growth of 45.0%
for the nine month period ending December 2021. Given strong revenue growth
and long-term relationships with various multinational corporations we assign a
"SUBSCRIBE" rating to the IPO.
Key Financials
Y/E March (` cr)
FY2018
FY2019
FY2020
Net Sales
341.4
501.5
528.9
% chg
-
46.9
5.5
Net Profit
41.3
49.2
53.0
% chg
-
19.2
7.6
EBITDA (%)
21.5
18.6
25.5
EPS (Rs)
8.3
9.8
10.6
P/E (x)
67.2
56.3
52.4
P/BV (x)
6.1
5.5
4.7
ROE (%)
9.0
9.7
8.9
ROCE (%)
6.5
6.2
7.5
EV/EBITDA
42.9
36.4
26.1
EV/Sales
9.3
6.8
6.6
Source: Company, Angel Research.
Note: Valuation ratios at upper price band.
SUBSCRIBE
Issue Open: March 12, 2021
Issue Close: March 16, 2021
Offer for Sale: 0 cr sh
QIBs 50% of issue
Non-Institutional 15% of issue
Retail 35% of issue
Promoters 65.4%
Others 34.6%
Fresh issue: 1.4 cr sh
Face Value: Rs 10
Present Eq. Paid up Capital: Rs 86.2 cr
Post Issue S hare holding Patter n
Post Eq. Paid up Capital: Rs 99.9cr
Issue size (amount): Rs 760 cr
Price Band: Rs 553-555
Lot Size: 27 shares and in multiple thereafter
Post-issue mkt. cap: *Rs 5527 cr - **Rs 5544 cr
Promoters holding Pre-Issue: 75.8%
Promoters holding Post-Issue: 65.4%
*Calculated on lower price band
** Calculated on upper price band
Book Building
Anupam Rasayan India Ltd
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IPO Note Chemicals
March 10, 2021
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Company background
Company primarily serves customers in the clean energy, nuclear and space and
Company was initially formed as a partnership firm as “Anupam Rasayan” with
effect from April 1, 1984 at Surat, Gujarat, India. Company key focus is on the
custom synthesis and manufacturing operations with in-house innovative processes
for manufacturing products requiring complex chemistries and achieving cost
optimization. It 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. However, most of the revenue comprises from
revenue from life science and agrochemical products.
Issue details
The issue comprises of fresh issues of up to Rs. 760 crore in the price band of
`553-555.
Pre and post IPO shareholding pattern
No of shares
(Pre-issue)
%
(Post-issue)
%
Promoter
65,344,896
75.8%
65,344,896
65.4%
Public
20,862,000
24.2%
34,55,5694
34.6%
Total
2,86,11,442
100%
3,07,59,591
100%
Source: Company, Angel Research & RHP.
Objectives of the Offer
Repayment/prepayment of certain indebtedness availed by our Company
(including accrued interest);
General corporate purposes
Enhance our visibility and our brand image among our existing and
potential customers
Key Management Personnel
Dr. Kiran C Patel is the Chairman of on Board and is a Non-Executive Director of
our Company. Dr. Patel holds a school certificate incorporating a general
certificate of education from the University of Cambridge and general certificate of
education examination from the University of London.
Ms. Mona A Desai is the Vice Chairman of our Board and a Whole-time Director
of the Company. She has been on our Board since the incorporation of the
Company in 2003. She holds a bachelor’s degree in home science from Shreemati
Nathibai Damodar Thackersey Women’s University, Mumbai. Ms. Desai was the
chairperson of the Board of the Company from April 23, 2013 until 21 August,
2020.
Mr. Anand S Desai is the Managing Director of the Company. He has been
associated with the company since 1992 and was one of the first Directors of the
Company. He has passed the final semester examination of the bachelor’s degree
in science from Vinoba Bhave University. He has over 28 years of experience in the
field of chemicals industry and has been actively involved in the day to day running
of our Company.
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Exhibit 1: Consolidated Profit & Loss Statement
Y/E March (` cr)
FY2018
FY2019
FY2020
9MFY2021
Total operating income
341
501
529
539
% chg
-
46.9
5.5
45.0
Total Expenditure
268
408
394
408
Cost of Materials Consumed
195
255
296
314
Purchase of Stock in Trade
6
8
1
-
Changes in Inventories
-48
-6
-86
-96
Employee Benefits Expenses
16
19
21
20
Other Expenses
98
133
162
170
EBITDA
74
93
135
131
% chg
-
27
45
28
(% of Net Sales)
22
19
26
24
Depreciation& Amortisation
18
23
29
38
EBIT
56
71
106
92
% chg
-
26
50
9
(% of Net Sales)
16
14
20
17
Finance costs
14
24
45
50
Other income(with income from associate)
9
19
11
24
(% of Sales)
3
4
2
4
Recurring PBT
51
65
71
67
% chg
-
28
10
21
Exceptional item
-
-
-
-
Tax
9
16
18
19
PAT (reported)
41
49
53
48
% chg
-
19
8
12
(% of Net Sales)
12
10
10
9
Basic & Fully Diluted EPS (Rs)
8.3
9.8
10.6
5.6
Source: Company, Angel Research
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Consolidated Balance Sheet
Y/E March (`cr)
FY2018
FY2019
FY2020
9MFY2021
SOURCES OF FUNDS
Equity Share Capital
50
50
50
86
Other equity (Retained Earning)
408
457
544
738
Shareholders Funds
458
507
594
825
Total Loans
391
617
761
703
Other liabilities
10
14
52
59
Total Liabilities
859
1,138
1,407
1,587
APPLICATION OF FUNDS
Property, Plant and Equipment
367
668
925
973
Rights-of-Use Assets
-
-
39
38
Capital Work-in-Progress
256
191
101
115
Intangible Assets
15
13
13
12
Current Assets
345
423
552
743
Inventories
173
195
297
421
Trade Receivables
88
121
129
141
Cash & Cash Equivalents
7
2
20
70
Other Bank Balance
2
5
7
8
Loans
16
21
25
29
Other Financial Assets
5
15
16
20
Other Current Assets
53
64
57
53
Investment
-
-
-
-
Current Liability
143
185
257
332
Net Current Assets
202
238
295
411
Other Non Current Asset
18
28
34
38
Total Assets
859
1,138
1,407
1,587
Source: Company, Angel Research
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Consolidated Cash flow
Y/E March (`cr)
FY2018
FY2019
FY2020
9MFY2021
Operating profit
82
110
152
105
Net changes in working capital
-94
-58
-48
1
Cash generated from operations
-12
51
104
106
Direct taxes paid (net of refunds)
-8
-13
-9
-9
Cash from operating activities (A)
-20
39
95
97
Net of cash acquired
-
0
-
-
Purchase of non-current investments
0
-
-
-
Others
-255
-250
-178
-165
Cash Flow from Investing
-255
-250
-178
-165
Financial charges (interest paid)
-14
-24
-44
-31
Payment of lease liabilities
-
-
-7
-
Non-current borrowings
56
187
43
32
Other borrowings (net)
65
43
74
42
Fresh Issue share capital
19
-
3
3
Security premium received
149
-
32
32
Cash Flow from Financing
275
206
101
79
Inc./(Dec.) in Cash
-1
-6
18
11
Opening Cash balances
8
7
2
2
Closing Cash balances
7
2
20
13
Source: Company, Angel Research
Key Ratios
Y/E March
FY2018
FY2019
FY2020
9MFY2021
Valuation Ratio (x)
P/E (on FDEPS)
67.2
56.3
52.4
99.5
P/CEPS
47.1
38.7
34.0
55.4
P/BV
6.1
5.5
4.7
5.8
EV/Sales
9.3
6.8
6.6
10.0
EV/EBITDA
42.9
36.4
26.1
41.4
Per Share Data (Rs)
EPS (Basic)
8.3
9.8
10.6
5.6
EPS (fully diluted)
8.3
9.8
10.6
5.6
Cash EPS
11.8
14.4
16.3
10.0
Book Value
91.5
101.4
118.7
95.6
Returns (%)
ROE
9.0
9.7
8.9
5.8
ROCE
6.5
6.2
7.5
5.8
Turnover ratios (x)
Receivables (days)
94.5
87.8
89.4
95.7
Inventory (days)
184.4
142.2
205.0
285.2
Payables (days)
152.4
134.6
177.3
225.0
Working capital cycle (days)
126.5
95.3
117.1
155.9
Source: Company, Angel Research
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Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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