The initial public offering of Anupam Rasayan India, a specialty chemicals company, has been subscribed 75 percent by noon on March 12, the first day of bidding. The issue will close on March 16.
Retail investors, once again, responded well to IPO, as the portion reserved for them was subscribed 1.51 times. The portion set aside for non-institutional investors witnessed 4 percent subscription, while qualified institutional buyers were yet to put in their bids.
The company has reserved 2.2 lakh equity shares for its employees who will get them at a discount of Rs 55 per share. The portion has seen a subscription of 5 percent so far.
The Rs 760-crore public issue has received bids for 72.64 lakh equity shares against the offer size of 97.01 lakh shares, data available on exchanges showed.
The offer size has been reduced to 97.01 lakh shares after the company raised Rs 225 crore from anchor investors on March 10.
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Anupam Rasayan is going to utilise the net issue proceeds of Rs 563.7 crore for repaying debt. The price band for the public issue has been fixed at Rs 553-555 per equity share.
“The company, at upper range of price band of Rs 555, is priced at around 95x TTM earnings optically looks expensive but there are enough growth levers on the front of topline growth, cost savings and reduction in interest cost. This gives us reasonable confidence for recommending subscribe on the issue,” said Prabhudas Lilladher.
One of India’s leading custom synthesis and manufacturing (CSM) company, Anupam Rasayan operates in life-sciences vertical, which contributed 95 percent to its revenue, and other specialty chemicals vertical.
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“It is favourably placed in the sweet spot to capture the rising demand for specialty chemicals given its strong relationships with MNCs (key clients- Syngenta, Sumitomo and UPL), leadership competencies into multi-step synthesis & complex chemistries such as etherification, hydrogenation, alkylation, nitration, etc and superior R&D capabilities enabling it to roll out new products in different chemistries & deliver large quantities,” the brokerage said.
Prospective topline growth and margin expansion would be driven by the development of in-house innovative processes for new complex chemistries, development of new products and commercialising technologies (photo-chemistry), enhancing capabilities in continuous and flow chemistry and expanding its competencies in Grignard, Ethylene Oxide, Ammoxidation and Iso Butylene, it added.
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