Anupam Rasayan IPO listing day strategy: Grey market premium falls; hold or book profits on debut day?

By: |
March 23, 2021 3:36 PM

Anupam Rasayan India shares will list on stock exchanges on Wednesday, March 24, 2021. The Rs 760-crore IPO was subscribed 44 times.

Anupam rasayan IPO, Anupam rasayan listing dayAnupam Rasayan India Limited (ARIL) has evolved into custom synthesis and manufacturing of life science-related specialty chemicals and other specialty chemicals. Image: Reuters

Anupam Rasayan India shares will list on stock exchanges on Wednesday, March 24, 2021. The Rs 760-crore IPO was subscribed 44 times. The issue was sold in the price band of Rs Rs 553-555 per share. In the grey market on Tuesday, Anupam Rasayan India shares were trading at Rs 625, implying a grey market premium of 12.6 per cent, over the issue price. Amid share market volatility, the grey market premium in Anupam Rasayan has fallen to Rs 70 from Rs 100, last week. Upon successful listing on Dalal Street, Anupam Rasayan will join its peers such as Navin Fluorine International Ltd, PI Industries, SRF Ltd and Astec Lifesciences Ltd.

Listing day strategy for Anupam Rasayan IPO

Anupam Rasayan India Limited (ARIL) has evolved into custom synthesis and manufacturing of life science-related speciality chemicals and other speciality chemicals, which involve multi-step synthesis and complex technologies, for a diverse base of Indian and global customers. Vikas Jain,  Senior Research Analyst at Reliance Securities, told Financial Express Online that considering capacity utilization of 75 per cent as of 9MFY21 and likely interest cost savings from debt repayment from IPO proceeds, its earnings can potentially register 35-40 per cent CAGR over FY20-23E. “Despite factoring this, it trades at over 40x of FY23 earnings, which is expensive compared to its quality peers,” he said. Jain has advised investors to sell Anupam Rasayan India shares on listing day.

Gaurav Garg, Head of Research, CapitalVia Global Research, also echoed similar views and advised investors to book profits in Anupam Rasayan India Ltd on listing. In case, Anupam Rasayan lists above 30-50 per cent premium over the issue price, Vishal Wagh, Head of Research, Bonanza Portfolio Ltd, advised investors to book listing gains.

Anupam Rasayan 11th IPO to list so far in CY21

So far in the calendar year 2021, primary markets have witnessed the IPO listing of 10 companies. Anupam Rasayan India will be the 11th company to list on the bourses. While, out of 15 IPOs last year (from April-December 2020), just three companies Chemcon Specialty (115%), Happiest Minds Technologies (111%), and Route Mobile (102.28%), were listed with over 100 per cent premium over the IPO price on debut day. Anupam Rasayan India enjoys a long-standing relationship with its customers, given its fully integrated operations with presence across the value chain. It derives 87 per cent of its revenue from top 10 customers with whom it has long term agreements between 2-5 years, say analysts at Motilal Oswal Financial Services.

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