Anupam Rasayan (ARL), engaged in manufacturing of custom synthesis (CSM) and specialty chemicals in India, saw a lacklustre listing today on the exchanges - down 6% against its issue price of Rs 555/share.

The Rs 7,600 million IPO of ARL was subscribed 44 times earlier this month but given market volatility, its grey market premium had fallen substantially to just Rs 100/share.

Despite some GMP, the stock made a weak debut at Rs 520/share. ARL has a diversified product portfolio with life science related specialty chemicals (agrochemicals, personal care and pharmaceuticals) contributing 94% of revenue, while other specialty chemicals (specialty pigment and dyes, and polymer additives) formed 6% of revenue.

Commenting on the ARL IPO, Hemang Jani, Head Equity Strategy, Broking & Distribution, Motilal Oswal Financial Services, "With major capex behind, the sweating of assets would help ARL capitalize on the growth opportunities of CSM market (expected to grow at 12% CAGR over next 5 years). The funds raised will be utilized to repay debt of Rs 5.6 billion, post which the company would become debt free. However, the valuations were little on a higher side and given the current market sentiment, this led to a weak listing.

Further there are too many IPOs hitting the market at the same time which is resulting in quick rotation of money. Speciality chemical segment is also getting over-crowded; thus, companies with over-valuation are not well supported at a time of weak market cues."

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