Rossari Biotech Ltd IPO Analysis

Rossari Biotech Ltd IPO Analysis

Rossari Biotech Ltd incorporated in 2009 which is a manufacturer of textiles specialty chemicals. It provides customized solutions to the apparel, animal & poultry feed, and FMCG industries by offering a diversified product portfolio. Rossari Biotech operates in 18 countries including India, Bangladesh, Vietnam, and Mauritius. It is the largest textile specialty chemical manufacturer in India. Their business can be classified into following three categories: 

1. Textile Speciallity Chemical
2. Animal Health & Nutrition Products
3. Home Personal care & Performance Chemicals.

Company is having 1948 different products range under above mentioned categories.

Most of the products of the company are manufactured in-house. It has a manufacturing unit located at Silvassa, Dadra & Nagar Haveli with an installed capacity of 100,000 MTPA. The company is also setting up a manufacturing unit at Dahej in Gujarat with an installed capacity of 132,500 MTPA. Rossari Biotech also has two R&D facilities in Silvassa and Mumbai locations to focus on new product development, formulations, and cost competitiveness. It has more than 194 distributors across India and 27 distributors spread in other 17 countries.

Following are Core strengths of Company:

1. Diversified Product Portfolio
2. Well Known Textile specialty chemical manufacturer in India
3. In house Manufacturing unit
4. Strong R&D facility
5. Pan India distribution network.

Objective of the Issue:

1. General Corporate Purpose
2. Funding working capital requirements
3. Repayment or Prepayment of certain indebtness availaed by company. 

   View Point:

In my view this cannot be termed as an IPO it is purely OFS. Moreover the IPO price is little over valued and PE is very high. Seeing the current market condition it is recommended to avoid the IPO, however fresh buying can be done after listing of share in market i.e after 23rd July 2020 for long term view. 

As far as long term view is concerned, company is having good R &D and supply chain, moreover PM focusing on Make in India and Local for Vocal, this company will be benefited by this. 

Sources: Various publications

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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