Home / Markets / Ipo /  Anupam Rasayan IPO subscribed 31 times: Grey market premium, other details

The IPO of speciality chemicals company Anupam Rasayan closed today and was subscribed 31 times. Ahead of the IPO, the company had raised 225 crore from anchor investors, including foreign portfolio investors, domestic mutual funds, insurance companies and alternative investment funds. Anupam Rasayan has fixed a price band of 553-555 a share for its 760-crore initial share sale. Some brokerages have recommended subscribe to the issue despite it being aggressively priced.

The grey market premium on Anupam Rasayan shares last heard is 225-230, says a market observer. "The recent IPOs are aggressively priced but owing to the bullish sentiments in primary market it seems that the issue will get a good response," says Abhay Doshi, who is the founder of UnlistedArena.com, which deals in pre-IPO and unlisted shares.

Here are 10 things to know about Anupam Rasayan issue:

1) The lot size in Anupam Rasayan IPO is 27 and KFin Technologies Private Limited is the registrar of the IPO.

2) According to brokerages, the listing of Anupam Rasayan shares are likely to be finalised on March 19 and shares could get listed on March 24, 2021.

3) Anupam Rasayan IPO is an entirely fresh issuance of equity shares and proceeds of the issue would be mainly used to repay debt and general corporate purpose.

4) Half of the issue is reserved for qualified institutional buyers, 35% for retail investors, 15% for non-institutional bidders.

5) Post IPO, the promoter shareholding in Anupam Rasayan IPO will fall to 65.4%, from 75.8% earlier.

6) Axis Capital, Ambit Private, IIFL Securities and JM Financial are merchant bankers for the issue.

7) Anupam Rasayan is engaged in the custom synthesis and manufacturing of specialty chemicals business. It commenced 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.

8) The company has developed strong and long-term relationships with various multinational corporations, including, Syngenta Asia Pacific Pte. Ltd., Sumitomo Chemical Company Limited and UPL Limited that has helped it expand product offerings and geographic reach across Europe, Japan, United States and India. The government of India has also recognized the Company as a three-star export house.

9) The company's revenue from operations increased by 45 per cent to 539.22 crore in the nine months ended December 31, 2020, from 371.80 crore in the year-ago period.

10) "In the recent past, the company has a robust track record of performance. It is expected that company will be able to gain more market share and simultaneously its margins will also improve. Company has priced its issue at 95.2x PE at the upper band on a trailing basis which is aggressively priced as compared to its peers. However, considering the rising fancy for life care and specialty chemicals segment linked with future performance trends, the company is expected to do well post listing going forward," domestic brokerage Anand Rathi said in a note.

Moreover, "Anupam Rasayan has a strong financial position and has been generating positive cash flow. We are positive on the long-term prospects of the Company. hence, we recommend a "Subscribe" rating to this IPO," it added.

Another brokerage, Samco Securities also recommends subscribe on the issue. "At the upper IPO price band of 555, the offer is valued at a price/earnings of around 68 times which is overvalued compared to the industry average P/E of 42x. Given the current growth dynamics, the valuations seem to be pricey. Having said that the issue is commanding a high grey market premium given the bullish nature of the market, excess liquidity, and IPO frenzy," the brokerage said.

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