Anupam Rasayan IPO Opens. Should You Invest?

Anupam Rasayan's Rs 760 crore initial public offer (IPO) opened for subscription today i.e. March 12 and will close on March 16. The shares of the specialty chemical company will be sold in the price band of Rs 553-555 per share.

The IPO will be a fresh issue of equity shares. Investors can place bids for a minimum of 27 equity shares and in multiples of 27 equity shares, extending up to 13 lots. A total of 50 per cent will be reserved for QIBs, 15 per cent for non-institutional investors and 35 per cent for retail investors. Some portion will also be reserved for the company employees.

Anupam Rasayan will utilise the IPO proceeds to repay debt and for general corporate purposes.

On March 10, Anupam Rasayan raised Rs 225 crore from 15 anchor investors, including Aditya Birla Sunlife Mutual Fund (MF), Nomura Funds Ireland Public Company, Fidelity International, Sundaram MF and SBI Life Insurance Co.

Anupam Rasayan started operations at Surat in 1984. It has six multi-purpose manufacturing facilities across Gujarat, with an installed capacity of about 23,396 metric tonnes.

Axis Capital, Ambit Private, IIFL Securities and JM Financial are the book-running lead managers to the issue.

"Anupam Rasayan has strong and long-term relationships with various multinational corporations, including Syngenta Asia Pacific, Sumitomo Chemical Company Limited and UPL. The company has posted strong revenue growth of 24.3 per cent CAGR between FY2018 to FY2020. Despite the impact of the COVID-19 pandemic, the company has posted revenue growth of 45.0 per cent for the nine month period ending December 2021," Angel Broking said in a note to its investors. 

"Given strong revenue growth and long-term relationships with various multinational corporations, we assign a "SUBSCRIBE" rating to the IPO," Angel Broking added.

Motilal Oswal has subscribe rating on the issue. The brokerage in a note to its clients said, "We like ARL given its presence in high growth CSM market, wide product portfolio, strong client relationship and high entry barriers. The company is expected to witness strong growth for next 2-3 years given its recent completion of major capex and strong sectoral tailwinds. The issue is valued at 3.5x FY21 P/BV and 7.7x FY21 EV/Sales on an annualized and post issue basis. Though the valuation appears little on a higher side both on absolute and relative basis, in the current scenario market prefers emerging growth stories. Hence we recommend Subscribe."