The initial public offering (IPO) of Anupam Rasayan, a specialty chemicals firm opened on Friday (March 12) with a price band of Rs 553-555 per share. The issue, which will close on March 16, aims to raise Rs 760 crore through the IPO.
This will be the 11th issue to launch in the calendar year 2020 after Indian Railway Finance Corporation, Indigo Paints, Home First Finance Company, Stove Kraft, Brookfield India REIT, Nureca, RailTel Corporation of India, Heranba Industries, MTAR Technologies and Easy Trip Planners.
The company on March 10 raised Rs 225 crore from 15 anchor investors at Rs 555 per share, ahead of its initial share-sale. Among the 15 anchor investors are Aditya Birla Sunlife Mutual Fund (MF), Nomura Funds Ireland Public Ltd Company, Fidelity International, Sundaram MF, SBI Life Insurance Co, IIFL Special Opportunities Fund, Malabar Select Fund, and Max Life Insurance.
Here's all you need to know about the issue:
Opening Date: March 12, 2021
Closing Date: March 16, 2021
Price Band: The price band for the issue has been set at Rs 553-555 per share.
About the firm: Anupam Rasayan commenced operations in 1984 with conventional products and now it makes specialty chemicals that involve multi-step synthesis and complex chemistries. It has six multi-purpose manufacturing facilities based in Gujarat with a combined aggregate installed capacity of around 23,396 metric tonnes.
Size of the issue: The IPO comprises a complete fresh issue of 1.37 crore equity shares by the company. This would result in the promoter’s stake reducing from 75.8 percent pre-IPO to 65.4 percent post-IPO. The Surat-based company has also reserved about 2.20 lakh shares for employees. Half of the issue is reserved for qualified institutional buyers, 35 percent for retail investors, 15 percent for non-institutional bidders.
Minimum Bid: Investors can bid for a minimum of 27 equity shares and in multiples of 27 thereafter, resulting in a minimum investment of Rs 14,985 at a higher price band.
Objective: The issue proceeds would be used mainly for repayment of debt worth Rs 556.20 crore. As of September, the company had a total debt of Rs 861.58 crore.
Book Runners: Axis Capital, Ambit Private, IIFL Securities and JM Financial are the merchant bankers for the issue.
Financials: In the first half of FY21, the company had posted a profit of Rs 26 crore as against Rs 22 crore in the year-ago period. Revenue for the period stood at Rs 355 crore, up 51.5 percent YoY. Over FY18-20, the company’s revenue and PAT grew at a CAGR of 24 percent and 140 percent, respectively while EBITDA margins expanded 397 bps to 25.5 percent. Backward integration in FY15 helped the firm reduce its import dependence and improve its margins. Focus on higher-value products also supports margins.
Clients: The company has long-term business with clients like Syngenta Asia Pacific, Sumitomo Chemical Company, UPL Ltd across Europe, Japan, US besides India.
Outlook: Analysts are mostly mixed on the issue due to higher valuations but expectations of robust growth, market share gain and improved margins for the company going forward are key positives.
"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 the next 2-3 years given its recent completion of major capex and strong sectoral tailwinds. Though the valuation appears little on a higher side both on an absolute and relative basis, in the current scenario market prefers emerging growth stories. Hence we recommend Subscribe," said brokerage house Motilal Oswal in a note.
(Edited by : Ajay Vaishnav)
First Published: IST