Inside the IPO Filing Process from DRHP to Listing Day

Incorporated in 2008, Suryoday Small Finance Bank Ltd is a leading Small Finance Bank (SFB) in India. The company started offering SFB services in 2017. They serve customers in the unbanked and underbanked segments. Before SBF, the company operated as an NBFC.

Suryoday Small Finance Bank Ltd commenced microfinance operations in 2009 and has since expanded operations across 13 states and union territories, as of December 31, 2020.

As of December 31, 2020, our customer base was 1.44 million and our employee base comprised 4,770 employees and operated 554 Banking Outlets including 153 Unbanked Rural Centres (“URCs”).

The company has set up 661 customer service points (“CSPs”) as additional service or touch points during April 1, 2020, and January 31, 2021, and intend to continue to expand our reach through the CSP model.

The delivery platform also includes partnering with business correspondents (“BCs”) for sourcing both asset and liability business and have expanded our network and presence through their reach to promote financial inclusion.

The company has arrangements with various payment banks in India and has been able to leverage our relationship with such payment banks to grow our deposit base.

The distribution network comprises ATMs, phone banking, mobile banking, tablet banking, unified payment interface (UPI), CSPs, and internet banking services. The company’s operations are predominantly in urban and semi-urban locations due to greater income earning capabilities and employment opportunities in such areas compared with rural regions.

Gross Loan Portfolio has grown at a CAGR of 46.98% from ₹ 17,177.84 million as of March 31, 2018, to ₹ 37,108.42 million as of March 31, 2020, and was ₹ 39,082.29 million as of December 31, 2020.

Deposits have grown at a CAGR of 94.95% from ₹ 7,495.22 million as of March 31, 2018, to ₹ 28,487.15 million as of March 31, 2020, and was ₹ 33,438.40 million as of December 31, 2020. As of December 31, 2020, retail deposits comprised 72.40% of our total deposits.

Product Portfolio:

1. Joint Liability (Inclusive Finance)
2. Commercial Vehicle Loans
3. Affordable Housing Loans
4. Secured Business Loans
5. Micro-business Loans
6. MSME Loans
7. Financial Intermediary Group Loans

Strength of the Company:

• Customer-centric approach with a focus on financial inclusion
• Diversified asset portfolio with a focus on retail operations
• Fast evolving granular deposit franchise
• Leveraging emerging technologies to enhance the digital footprint
• Strong credit processes and a robust risk framework

Risks relating to business:

• Any adverse developments in the microfinance sector including any regulatory changes could adversely affect business
• Any volatility in interest rates or inability to manage interest rate risk could adversely affect Net Interest Margins
• Bank  and  Directors,  are involved in  certain  legal  proceedings,  any  adverse  developments  related  to  which could adversely affect business
• The company may face asset-liability mismatches,  which could affect liquidity and adversely affect profitability.

IPO Details:

IPO Date March 17th, 2021 to March 19th, 2021Issue Type Book Built Issue IPO Issue Size19,093,070 Eq Shares of ₹10(aggregating up to ₹582.34 Cr)Fresh Issue8,150,000 Eq Shares of ₹10(aggregating up to ₹248.58 Cr)Offer for Sale10,943,070 Eq Shares of ₹10(aggregating up to ₹333.76 Cr)Face Value Rs.10 per equity share IPO Price Rs. 303 to Rs. 305 equity share Min Order Quantity49Listing At BSE, NSE

IPO Objective:

The Bank proposes to utilize the Net Proceeds from the Fresh Issue towards:

• Augmenting the Bank's Tier-1 capital base to meet the Bank's future capital requirements.

Financial Performance:

ParticularsFor the year/period ended (₹ in Crores)31-Dec-2031-Mar-2031-Mar-1931-Mar-18Total Assets63,50.453,64.537,61.221,55.9Total Revenue6,89.8,54.15,97.03,24.9Profit After Tax54.81,11.190.311.4

Tentative Time Table:

• IPO Opens on 17 March 2021
• IPO Closes on 19 March 2021
• Basis of Allotment Date: Mar 24, 2021
• Initiation of Refunds: 24Mar, 2021
• The credit of Shares to Demat Account : 25Mar, 2021
• IPO Listing Date: 30 Mar 26, 2021

Outlook :

Suryoday SFB is among the leading SFBs in India in terms of net interest margins, return on assets, yields, and deposit growth and had the lowest cost-to-income ratio among SFBs in India in Fiscal 2020. Total assets show consistent growth.

Over the years, it has recorded a CAGR of 47.98%. This can be because of the fact that the gross loan portfolio of Suryoday has shown a CAGR of 46.98% over the past two years, from FY 2018 to FY 2020. The deposits, too, have shown a CAGR of 94.95%. From Rs. 749.52 crores in FY 2018, it has grown to Rs. 2,848.71 crores in FY 2020.

In fact, as of FY 2020, 54.44% of the total deposits came from the retail category. The net profit earned shows an overall increase, but in FY 2017 and FY 2018, the figures show a dip. The CAGR, in this case, is 47.05%. Over the past six years, the company has recorded a positive net cash flow from operating activities in only two years.

The rest of the year is characterized by the increasing negative value of net operating cash flow. This market is dominated by the top three small finance banks – AU, Equitas, and Ujjivan. Together, these three banks accounted for about 63% of the total assets under management in 2020.

Overall, there is significant growth expected in the near future. The deposit base of small finance banks increased by about 48% in FY 2020. A CAGR of 22% is predicted in the loan portfolio in this market. This growth is based on the fact that the Indian economy is focusing on the growth of the banking sector and financial inclusion. There is a significant market opportunity in the rural parts of the country.

Suryoday SFB is showing decent growth in both revenue and profit front whereas there is an improvement on the margin front as well. Over the period FY18-20, Gross Loan Portfolio, and Deposits have grown at a CAGR of 46.98% and 94.95% respectively.

If we talk about valuation then at the upper band the PE ratio works out to be around 23 while the PB ratio is around 2.3 which is in line with peers. This business has good growth potential amid a strong Indian economic growth outlook but it has its own systematic risks. Though valuation is not very lucrative by looking at strong growth in financials.

Incorporated in 1999, Nazara Technologies Ltd is a leading mobile game company in India. The company offers a range of diversified gaming products across the Interactive gaming, eSports, and gamified early learning ecosystem across emerging markets i.e. India, Africa, South East Asia, Middle East, and Latin America.

It is one of the leading live eSports streaming and on-demand eSports media content providers in India. Carrom Clash and World Cricket Championships in mobile games, Kiddopia in gamified early learning, Nodwin and Sportskeeda in eSports, and Halaplay and Qunami are some of its offerings.

The business operates in different segments; Subscription-based business, Freemium Business, eSports, Gamified early learning, and Real money gaming. Subscription business focuses on mass mobile internet users comprising mainly first-time mobile gamers.

The company derives maximum revenue from subscription fees charged from customers under the gamified early learning and eSports business segments.

Product Portfolio:

The company’s Product Portfolio comprises of three businesses:

• Subscription
• Freemium

Strength of the Company

• One of the leading eSports companies in India.
• Diversified business based on the geographical presence and gaming products.
• Strong leadership backed by marquee investors.
• Asset light business model.

Risks Relating to Business:

• The company is dependent on third parties for the distribution of their mobile games and billing pipeline.
• The company may be unable to cater to evolving consumer preferences in the mobile games industry.
• The company is subjected to the risks and uncertainties of conducting business outside India.

• A company’s inability to license intellectual property may adversely impact the growth of their Freemium Business.

IPO Details:

IPO Date March 17th, 2021 to March 19th, 2021 Issue Type Book Built Issue IPO Issue Size5,543,052 Eq Shares of Rs.4(aggregating up to Rs. 582.29 Cr)Fresh Issue NIL Offer for Sale5,543,052 Eq Shares of Rs. 4(aggregating up to Rs. 582.29 Cr)Face ValueRs.4 per equity share IPO PriceRs.1100 to Rs.1101 equity share Min Order Quantity13Listing At BSE, NSE

IPO Objective:

The company purposes to utilize funds towards the following objectives:

• To achieve the benefits of listing Equity Shares on the Stock Exchange.
• To carry out the sale of up to 5,543,052 Equity Shares by the Selling Shareholders

Financial Performance:

ParticularsFY18FY19FY201HFY21Total Assets470.76514.58776.83798.66Revenue172.00169.70247.50200.50Ebitda48.7016.30-5.506.10Ebitda margin (%)28.309.60-2.203.00Net profit2.7017.50-2.10-5.00Net profit margin: (%)1.5710.31-0.85-2.49

Tentative Time Table:

IPO Opens on :17 March 2021

IPO Closes on: 19 March 2021

Basis of Allotment Date: Mar 24, 2021

Initiation of Refunds: 24Mar, 2021

Credit of Shares to Demat Account: 25Mar, 2021

IPO Listing Date: 30 Mar 26, 2021

Outlook:

The digital gaming market worldwide has seen a paradigm shift in adoption and distribution as well as user behavior. The global games market generated revenue of $104.8 billion in 2016, up by 12.6% from 2015. Revenues will have potentially increased to $116.0 billion in 2017 and will continue to increase to $151.7 billion in 2021. Growth is expected to be driven from South-East Asia, the Middle East and India.

Eyeing the growth of the online gaming industry, the interaction with Smartphones and laptops of the youth and cheaper data prices, it is expected that the gaming industry is expected to reach new highs. Digital adverting is also expected to increase, which will help the tech gaming companies to do much better.

Gaming as a whole is a very big industry worldwide where Nazara Technologies is a leading India-based diversified gaming and sports media platform which has a strong brand name too.

Over the period of FY18-20, the revenues of the company have grown at a CAGR of 12.90% while net profit was on declining mode this was due to the new acquisitions made by the company. In FY19-20, Nazara Tech revenue has grown by 45% and it touched the revenue of 247 Crore.  The margins of the company are expected to zoom from the current levels.

Nazara Technologies may even trade at a higher multiple as it is a pure-play in the digital world and which has the potential of more than 30% CAGR growth. Its expansion into freemium and e-sports business will surely help the company to do better in the near future.

Laxmi Organic is a leading manufacturer of Acetyl Intermediates and Specialty Intermediates with almost three decades of experience in the large scale manufacturing of chemicals. Since its inception in 1989, it has been on a journey of transformation.

It initially started manufacturing acetaldehyde and acetic acid in 1992, and soon thereafter moved on to manufacturing ethyl acetate in 1996. It is currently among the largest manufacturers of ethyl acetate in India with a market share of approximately 30% of the Indian ethyl acetate market.

Laxmi Organic is the only manufacturer of diketene derivatives in India with a market share of approximately 55 % of the Indian diketene derivatives market in terms of revenue in Fiscal 2020 and one of the largest portfolios of diketene products. Its products are currently divided into two broad categories, namely the Acetyl Intermediates and Specialty Intermediates.

Alembic Pharmaceuticals Limited, Laurus Labs Limited, Granules India Limited, Hetero Labs Limited, Heubach Colour Private Limited, Hubergroup India Private Limited, Huhtamaki India Limited, Macleods Pharmaceuticals Private Limited, Suven Pharmaceuticals Limited, Colourtex Industries Private Limited, and UPL Limited are some of its customers.

The company has a global footprint with customers in 30 countries including but not restricted to China, Russia, Singapore, UAE, UK, USA, Netherland, etc. Currently, it has 2 manufacturing facilities in Mahad, Maharashtra for the manufacturing of AI and SI products. It is also proposing to set-up a new manufacturing facility at Lote Parshuram, Maharashtra to manufacture four speciality chemicals.

Product Portfolio:

The products currently manufactured by us are divided into two categories, namely the Acetyl Intermediates and Specialty Intermediates.

Acetyl Intermediates:

The Acetyl Intermediates find application in inter alia the pharmaceuticals, agrochemicals, inks and paints, coatings, printing, packaging, and adhesives industries. Ethyl acetate is used in multiple industries as a solvent.

Speciality Intermediates:

Specialty Intermediates comprise more than 34 products which include ketene, diketene derivatives namely esters, acetic anhydride, amides, arylides and other chemicals. Speciality Intermediates find application in inter alia the pharmaceuticals, agrochemicals, dyes and pigments.

Strength of the Company

• Leading manufacturer of ethyl acetate in India.
• The largest manufacturer of diketene derivative products.
• Diversified customer base across industries.
• Strategically located manufacturing facilities.
• Consistent financial performance.

RISKS RELATING TO BUSINESS

• Any failure to commercialize new products may adversely impact a company’s business.
• Any shortfall in the supply of our raw materials has an adverse effect on business
• The company is exposed to foreign currency exchange risks which may adversely impact the results of operations
• Any significant fall in global prices of products may have an adverse effect on business
• Disruptions of logistics could adversely affect our business and the results of operations.

IPO DetailsIPO DateMarch 15th, 2021 to March 17th, 2021Issue TypeBook Built Issue IPOIssue Size45,15,38,46 Equity Shares of ₹2 (aggregating up to ₹600.00 Cr)Fresh Issue23,07,69,23 Equity Shares of ₹2 (aggregating up to ₹300.00 Cr)Offer for Sale23,07,69,23 Equity Shares of ₹2 (aggregating up to ₹300.00 Cr)Face ValueRs.2 per equity shareIPO Price RangeRs.129 to Rs.130 per equity shareMinimum Order Quantity115 sharesListing AtBSE, NSE

IPO Objective:

The company purposes to utilize funds towards the following objectives:

• Investment in Yellowstone Fine Chemicals Private Limited (“YFCPL”)for funding its working capital requirements
• Funding capital expenditure requirements for expansion of its SI Manufacturing Facility
• Funding working capital requirements of the Company
• Purchase of plant and machinery for augmenting infrastructure development at its SI Manufacturing Facility
• Prepayment or repayment of all or a portion of certain outstanding borrowings availed by the Company & its wholly-owned Subsidiary, Viva Lifesciences Private Limited

Financial Performance:

Laxmi Organic’s financial performance (in INR crore)Financial YearFY2018FY2019FY2020H1 FY2021Revenue1,396.11,574.31,538.6814.4Expenses1,282.81,476.31,483.5758.2Net income76.072.369.745.6Net margin: (%)5.44.64.55.6

Tentative Time Table:

• IPO Opens on 15 March 2021
• IPO Closes on 17 March 2021
• Basis of Allotment Date: Mar 22, 2021
• Initiation of Refunds: Mar 23, 2021
• A credit of Shares to Demat Account: Mar 24, 2021
• IPO Listing Date: Mar 25, 2021

Outlook:

Incorporated in 1989, Laxmi Organic Industries Ltd is a specialty chemical manufacturer that operates in 2 business segments; Acetyl Intermediates (AI) and Specialty Intermediates (SI)

According to the Frost & Sullivan Report, given its expertise in the Acetyl Intermediates and the Specialty Intermediates segments, its entry into the fluorochemicals space will put it in a differentiated position from other chemical manufacturers.

Laxmi Organic has been the largest exporter of ethyl acetate from India in the six months ended September 30, 2020, and Fiscals 2020, 2019, and 2018 and one of the largest exporters of ethyl acetate to Europe from India since 2012.

For the six months ended September 30, 2020, and the Fiscals 2020, 2019, and 2018, its Company’s revenue from exports of manufactured products contributed 23.17%, 24.24%, 27.80%, and 22.18%, respectively, of its revenue from operations on a standalone basis.

The company has had stable revenue growth over the last three years though the company has not grown significantly over the same period, while we can see a decline in net profits too. The margins of the company have been stable varying between 4%-6%.

At the upper price band of Rs. 130 and EPS of Rs. 2.86, the PE works out to be 37.68 which is higher than the industry average of 21.70. However, their entry into a high margin business of specialty fluorochemicals though the IPO justifies the higher PE.

Eyeing the growth of the intermediaries industry and its growth globally we may expect the company to do well in the upcoming years. Laxmi Organic was the largest exporter of ethyl acetate from India in the six months ending September 2020. We may expect the company to do much better with the new acquisition.

Kalyan Jewellers is one of the largest jewellery companies in India based on revenue as of March 31, 2020. It started its jewellery business in 1993 with a single showroom in Thrissur, Kerala.

The key business activities of the company are to design, manufacture, and sell a variety of gold, studded and other jewellery products for various occasions i.e. wedding, festivals, etc.

Initially, the company was started with a single showroom in Kerala, and over the years, it has expanded its presence with 107 showrooms located across 21 states and union territories in India.

It not just serves the domestic market but also serves overseas customers with 30 showrooms located in the Middle East. The company generates a significant portion of revenues from gold jewellery, accounted for 74.77% in fiscal 2020 followed by studded (diamond and precious stone) and other jewellery segments.

Kalyan Jewellers designs manufacture and sells a wide range of gold, studded and other jewellery products across various price points ranging from jewellery for special occasions, such as weddings, which is its highest-selling product category, to daily-wear jewellery.

Product Portfolio:

The company design, manufacture and sell a wide range of jewellery products at varying price points for uses ranging from jewellery for special occasions such as weddings, which is our highest sold product category, to daily-wear jewellery.

Product Category:

• gold jewellery,
• studded jewellery (including diamond) and
• other jewellery (including platinum jewellery and silver jewellery)

Strength of the Company

• One of India's largest jewellery companies.
• Trusted Jewelry brand.
• Strong network distribution with global outreach.
• Wide range of jewellery product offerings.
• Experienced promoters and managers.

RISKS RELATING TO BUSINESS:

• Changes or a downturn in economic conditions may affect consumer spending, including on a company’s products.
• The company may be unable to expand our product offerings and distribution channels
• The company’s income and sales are subject to seasonal fluctuations which may have a disproportionate effect on the results of operations.
• Company’s business depends on promoters and senior management and their ability to attract and retain sales personnel

IPO Details:

IPO Date March 16th, 2021 to March 18th, 2021Issue Type Book Built Issue IPO Issue Size135057471 Eq Shares of ₹10(aggregating up to ₹1,175.00 Cr)Fresh Issue91954023 Eq Shares of ₹10(aggregating up to ₹800.00 Cr)Offer for Sale43103448 Eq Shares of ₹10(aggregating up to ₹375.00 Cr)Face ValueRs.10 per equity share IPO PriceRs.86 to Rs.87 equity share Min Order Quantity 172 Listing At BSE, NSE

IPO Objective:

The company purposes to utilize funds towards the following objectives:

• To finance business working capital requirements.
• To meet general corporate purposes.

Financial Performance:

Kalyan Jewellers’ financial performance (in INR crore)FY2018FY2019FY20209M FY2021Revenue10,580.29,814.010,181.05,549.8Expenses10,366.49,793.19,960.15,608.9Net income140.9-4.8142.2-79.9Margin (%)1.30.01.4-1.4

Tentative Time Table:

IPO Opens on 16 March 2021

IPO Closes on 18 March 2021

Basis of Allotment Date: Mar 24, 2021

Initiation of Refunds: Mar 2021

Credit of Shares to Demat Account: Mar 2021

IPO Listing Date: Mar 26, 2021

Outlook:

Kalyan Jeweller is one of India’s largest jewellery companies with a pan-India presence. The hyperlocal strategy enables the company to cater to a wide range of geographies and customer segments.

In Fiscal 2020, 78.19% of its revenue was from India and 21.81% was from the Middle East. Over the same period, 74.77% of its revenue from operations was from the sale of gold jewellery, 23.36% was from the sale of studded jewellery (which includes diamonds and precious stones), and 1.87% was from the sale of other jewellery.

In fact, in Fiscal 2019, the revenue earned fell by over 9%. This was attributed due to an experimental strategy that the company adopted in that year. The questionable strategy was withdrawn after that year, and the revenue again increased by 3.58%. As the revenue from operations declined in FY 2019, this is also reflected by the net profit earned by the profit.

Another factor that can contribute to the dismal performance in FY 2019 is the severe floods that hit the southern part of India during this time. Owing to this, the demand for gold jewellery was affected.

The total assets owned by the company has shown a CAGR of 5.02% between 2017 and 2020. One positive fact to note here is that the long-term debt of Kalyan Jewellers has shown a consistent decline over the years.

As for India, expenditure on jewellery is one of the top constituents of retail consumption. In 2020, the amount spent on jewellery amounted to Rs. 449 thousand crores. This is expected to grow to Rs. 633 thousand crores by 2025 which will surely benefit the company in the long run.

Incorporated in 1986, Craftsman Automation Ltd is a leading engineering organization that is engaged in manufacturing precision components. The company designs, develops and manufactures a range of engineering products. It is one of the leading players in the machining of cylinder blocks for the tractor segment.

The business operates 3 key segments namely Automotive-Powertrain and others, Automotive-Aluminium Products, and Industrial and Engineering division that is engaged in manufacturing material handling equipment i.e. hoists, industrial gears, marine engines, crane kits, gearboxes, locomotive equipment, storage solutions, etc.

The company owns 12 state-of-the-art manufacturing facilities across 7 cities of India. Its customer base includes Tata Motors, Daimler India, Tata Cummins, Mahindra & Mahindra, Royal Enfield, Siemens, Escorts, Ashok Leyland, VE Commercial Vehicles, TAFE Motors & Tractors, etc.

Furthermore, it has two wholly-owned overseas subsidiaries, namely Craftsman Marine B.V. and Craftsman Automation Singapore Pte Limited. Craftsman Marine B.V. is engaged in the marketing, sales, and servicing of marine engines, engineering products and accessories for propulsion, manoeuvring and steering parts, storage, electronic instruments, deck equipment and spare parts for all the engines and other equipment used in yachts.

These products are manufactured and assembled by us in India and sold under the name “Craftsman Marine” by our subsidiary. Craftsman Automation Singapore Pte Limited, also set up in 2008 in Singapore, is its strategic sourcing centre for overseas procurement, primarily for procurement of aluminum ingots, which is one of its key raw materials.

Product Portfolio:

The company has three business segments :

Automotive – Powertrain and Others

Automotive – Powertrain and Others segment include engine parts such as cylinder block and cylinder head, camshafts, transmission parts, gear box housings, turbo charges and bearing caps.

Automotive – Aluminium Products

The Aluminium Products segment include crank case and cylinder blocks for two-wheelers, engine and structural parts for passenger vehicles and gearbox housing for a heavy commercial vehicle.

Industrial & Engineering Segment

This segment can be divided into two sub-segments, namely, High-End Sub-Assembly, Contract Manufacturing & Others and Storage Solution & Material Handling.

Strength of the Company

• Leading engineering product manufacturer.
• Strategically located and vertically integrated manufacturing facilities.
• Strong product design capabilities.
• Robust financial performance.

RISKS RELATING TO BUSINESS

• Company’s Inability to meet obligations under debt financing arrangements could adversely affect business.
• Group Companies have incurred losses in the last three Fiscals.
• The company do not have long term contracts with any of our supplier which could adversely affect their business.
• The company is subject to risks arising from interest rate fluctuations, which could adversely affect its results.
• The company has been unable to locate certain of its corporate records.

IPO Details:

IPO DateMarch 15th, 2021 to March 17th, 2021Issue TypeBook Built Issue IPO Issue Size5528161 Eq Shares of ₹5(aggregating up to ₹823.70 Cr)Fresh Issue1,006,711 Eq Shares of ₹5(aggregating up to ₹150.00 Cr)Offer for Sale4,521,450 Eq Shares of ₹5(aggregating up to ₹673.70 Cr)Face ValueRs.5 per equity shareIPO PriceRs.1488 to Rs.1490 equity shareMin Order Quantity10Listing AtBSE, NSE

IPO Objective:

The company purposes to utilize funds towards the following objectives;

• To make repayment/pre-payment of company's borrowing fully or partially.
• To meet general corporate purposes.

Financial Performance:

Craftsman Automation’s financial performance (in INR crore)FY2018FY2019FY2020H1 FY2021Revenue1,522.91,831.61,501.1536.5Expenses1,479.61,692.11,437.9526.1Net income25.687.841.75.6Net margin: (%)1.74.82.81.0

Tentative Time Table:

• IPO Opens on 15 March 2021
• IPO Closes on 17 March 2021
• Basis of Allotment Date: Mar 22, 2021
• Initiation of Refunds: Mar 23, 2021
• The credit of Shares to Demat Account: Mar 24, 2021
• IPO Listing Date: Mar 25, 2021

Outlook:

Craftsman Automation commenced its operations in 1986 in Coimbatore, in the State of Tamil Nadu, India. It is a diversified engineering company with vertically integrated manufacturing capabilities.

It is the largest player involved in the machining of cylinder blocks and cylinder heads in the medium and heavy commercial vehicles category. Craftsman owns and operates 11 strategically located manufacturing facilities across seven cities in India, with a total built-up area of over 1.5 million sq. ft.

The revenues of the company have been in a declining mode over the last three years. However, the key point to note is that over the last five years the auto sector has not done pretty well and we are seeing a turnaround in the industry after the lockdown and Craftsman automation is doing well since then.

Craftsman is the top 3-4 component manufacturers with respect to cylinder block matching in the case of the tractor industry, which is a very positive thing for the company and we expect things to do better form year.

At the upper price band of Rs. 1490 and 3 years average EPS of Rs. 28.95 the PE works out to be 51x as while current the PE of the industry is 60.7x. The valuations of the company look attractive at the current level and as the auto industry is expected to do well in the near future we may expect that company should do well too.

Anupam Rasayan India Limited is one of the leading companies engaged in the custom synthesis and manufacturing of specialty chemicals in India. The company started business as a partnership firm in 1984 as a manufacturer of conventional products.

Their business verticals are (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, company’s focus is to manufacture products with sustainability using our continuous process technology through flow chemistry and photochemistry, greater R&D and engineering capabilities to deliver values for customers for their complex and multi-step synthesis projects.

Green manufacturing and green growth have always been at the top of the agenda, they have developed new eco-friendly, safer and novel routes for many products. Most of these products have been introduced on an exclusive basis for their customers.

Certain of their facilities are ISO 9001:2015 and ISO 14001:2015 certified companies with sound technology, environment consciousness, rich history of innovation through research, and a total commitment to excellence towards quality and sustainability.

There are six manufacturing sites that are located in the state of Gujarat: 4 sites are in Sachin, Surat and 2 state of art sites are in Jhagadia, Gujarat.

Product Portfolio:

The company’s products and services are organized primarily in the following segments:

• The company manufactures agro intermediates and agro active ingredients for the agrochemicals industry which are used in the manufacture of insecticides, fungicides and herbicides.
• For the personal care industry, companies provide anti-bacterial and ultraviolet protection intermediates and ingredients
• In the pharmaceutical segment, companies focus on developing intermediates and ‘key starting materials’ for active pharmaceutical ingredients, and may also be used in material sciences and surface chemistry.

Strengths of the Company

• Strong and long-term relationships with diversified customers across geographies with significant entry barriers
• The core focus on process innovation through consistent R&D, value engineering and complex chemistries
• Diversified and customized product portfolio with a strong supply chain
• Automated manufacturing facilities with a strong focus on the environment, sustainability, health, and safety measure
• Consistent track record of financial performance
• Experienced promoters and a strong management team.

RISKS RELATING TO BUSINESS

• Any unplanned or prolonged disruption of our manufacturing operations could materially and adversely affect business
• The shortfall in the availability or quality of raw materials could have an adverse effect on business and the results of operations
• Any failure to raise additional financing could have an adverse effect on business
• Any failure to comply with quality standards may adversely affect business
• Reduction in demand for products could adversely affect our business, results of operations, financial condition, and cash flows

IPO Details:

IPO Date March 12th, 2021 to March 16th, 2021 Issue Type Book Built Issue IPO Issue Size Rs 760 Cr Fresh Issue 13693693 Equity Shares aggregating to Rs 760 Cr Offer for Sale NIL Face Value Rs.10 per equity share IPO Price Rs.553 to Rs.555 equity share Min Order Quantity 27 Listing At BSE, NSE

IPO Objective:

The net proceeds of the Issue, i.e. Gross proceeds of the Issue less the Issue expenses (“Net Proceeds”) are proposed to be utilized in the following manner:

• Repayment/prepayment of certain indebtedness availed by our Company (including accrued interest)
• General corporate purposes

Financial Performance:

FY2018FY2019FY20209M FY2021Revenue349.2521.0539.4563.2Expenses299.4455.2468.0496.4Net income40.149.351.247.1Net margin: (%)11.59.59.58.4

Tentative Time Table:

• Price Band announced 8 March 2021
• IPO Opens on 12 March 2021
• IPO Closes on 16 March 2021
• IPO Allotment on 19 March 2021
• Unblocking ASBA 22 March 2021
• Credit to Demat Accounts 23 March 2021
• IPO Listing on 24 March 2021

Outlook:

Anupam Rasayan commenced operations in 1984 as a partnership firm with conventional products and now it makes specialty chemicals that involve multi-step synthesis and complex chemistries.

The company’s R&D team has successfully carried out the multi-step synthesis and scale-up for several new molecules in the area of life sciences related specialty chemicals and other specialty chemicals, and as a result, expanded its commercialized product portfolio from 25 products in Fiscal 2018 to 34 products in Fiscal 2020 and 36 products in the six months September 30, 2020

The company’s total revenue has increased at a CAGR of 24.29% from Rs 3,49.1 Cr in FY18 to Rs 5,39.3 Cr in FY20 and was Rs 2,37.5 Cr and Rs 3,73.5Cr in the six months ended September 30, 2019, and 2020, respectively.

EBITDA for the year 2018, 2019, 2020 and the six months ended September 30, 2019 and 2020 was Rs 74.5 Cr, Rs 92.1 Cr, Rs 1,34.8Cr, Rs 57.5 Cr, Rs 77.4 Cr, respectively while its EBITDA margin was 21.82%, 18.38%, 25.51%, 24.55% and 21.79%, respectively, for similar periods.

Its profit after tax and share of profit of associates was Rs 41.3 Cr, Rs 49.2Cr, Rs 52.9 Cr, Rs 21.7 Cr and Rs 26.4 Cr for Fiscals 2018, 2019, 2020 and the six months ended September 30, 2019, and 2020, respectively, while it's PAT margin was 11.83%, 9.45%, 9.82%, 9.15% and 7.09%.

The company’s revenue and PAT have increased over the year but the margins have declined. At an upper price band of Rs 555 and EPS of 6.94, the PE comes out to be 79.97 which is higher than the PE of peers which is at 42.81.

Eyeing the growth of specialty chemical business we may expect to see a boost in revenue and profit. However, companies might have to work on the margin front. The company would be paying off debt by raising money from the IPO which will help in gaining the margins going further.