Rossari Biotech lists at Rs 670, a premium of 58% over issue price

NEW DELHI: Rossari Biotech made a solid debut on Thursday, as the scrip got listed at Rs 670 on BSE, a premium of 57.65 per cent over its issue price of Rs 425.

Analysts were largely expecting the stock to list in the Rs 575-605 range.

The initial public offering, sold in the price band of Rs 423-425 from July 13 to July 15, was subscribed over 79 times.

At the issue price, the stock demanded a valuation that was 19.9 times FY20’s EV/Ebitda and 33.1 times earnings per share on a FY20 basis.

Rossari is among the largest manufacturers of textile specialty chemicals in India. It also manufactures acrylic polymers. The company offers three main product categories -- namely home, personal care and performance chemicals; textile specialty chemicals and animal health & nutrition products.

The home care segment accounted for 46.81 per cent of its total revenues in FY20 (against just 18.63 per cent in FY18), textile specialty 43.71 per cent (from 71.54 per cent in FY18) and animal healthcare 9.48 per cent (9.83 per cent in FY18).

The company said that the demand for disinfectants & sanitizers has surged, but the textile specialty chemicals segments witnessed a temporary plunge due to Covid 19. Overall, the company offers 2,030 different products in 18 countries and has two R&D facilities – one within its Silvassa manufacturing facility and the second in Mumbai.

Rossari manufactures a majority of its products in-house at its Silvassa manufacturing facility and is setting up another manufacturing facility at Dahej in Gujarat with a proposed installed capacity of 132,500 MTPA.

The company's total revenue grew at a compounded annual growth rate of 41.65 per cent over FY18-20, Ebitda during the same period was up 56.58 per cent annually and profit after tax expanded 60.27 per cent over the same period.

Rossari reported a return on net worth of 31.79 per cent for FY20, 43.32 per cent for FY19 and 34.08 per cent FY18. The return on capital employed (RoCE) stood at 24.79 per cent for FY20, 50.93 per cent for FY19 and 34.68 per cent for FY18.