Anupam Rasayan India trades at 6.85% discount, what should be your listing strategy?

Shares of Surat-based Anupam Rasayan India opened for trading at Rs 520 on the National Stock Exchange, compared to the issue price of Rs 555, implying a discount of 6.31%. On the BSE, Anupam Rasayan India opened at Rs 534.70, at a discount of 3.66%.

Anupam Rasayan share price soared after listing and made a high of Rs 548.95 on the BSE. In afternoon trades it was quoting in line with the listing price at Rs 518.70, Rs 36.30 below the issue price. So, what should be your listing day strategy?

“Long term investors can stay invested looking at the market sentiments maybe the issue on this listing is seeing pressure. That is because of two reasons one is the market is under pressure. Secondly, those investors who would have leveraged funds and over-invested in this company purely for listing gains, they would have got nervous, and they would liquidate to repay leverage. The companies into chemicals, speciality chemicals, for long term it is likely to do well and the management has also spoken about reducing debt and acquiring new businesses in terms of organic and inorganic growth,” said Gaurang Shah, Senior Vice President at Geojit Financial Services.

Shikher Jain, Manager – Equity Research at Anand Rathi Shares and Stock Brokers also has a similar opinion and said that “Anupam Rasayan has posted a strong financials for the last 3-years. Although the company is trading at a little bit of higher valuation of PE 95.2x but considering the rising fancy of specialty chemicals and strong client relationships with various MNCs so it is expected that the company will witness strong growth in coming years. So considering all these, we are “Positive” on the company for long term prospective.”

Whereas Saurabh Joshi, Research Analyst at Marwadi Shares and Finance believes that investors who have been allotted the shares can hold it for the long term and in case of meaningful correction, they can buy more shares to average down their price.

“The demand for speciality chemical is robust and the company has already done huge capex in the last three fiscals. Issue price of Rs.555/- implies a P/E of 95.16X based on TTM EPS. Going ahead, robust jump in topline and bottom-line is expected based on past capex and strong demand environment, which will make the valuation attractive,” added Joshi.

Anupam Rasayan started operations in 1984. It currently has two business verticals, viz. life science-related specialty chemicals comprising products pertaining to agrochemicals, personal care and pharmaceuticals; and other specialty chemicals, comprising specialty pigment and dyes, and polymer additives.

The company compares itself with listed counterparts like PI Industries, Navin Fluorine International, Astec Lifesciences and SRF.

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