ROSSARI BIOTECH IPO APPLY OR NOT ?

ROSSARI BIOTECH IPO AS PER MY VIEW YOU CAN APPLY FOR IT.

10-20% LISTING GAINS POSSIBLE IF MARKET REMAINS STABLE OR AROUND THIS LEVELS IF MARKET FALLS MUCH BEFORE IPO OPENS LIKE SBI CARDS THAN LISTING GAINS IS NOT POSSIBLE

DISCLAIMER - MAKE YOUR OWN RESEARCH BEFORE TAKING ANY DECISION ON APPLY OR NOT OR ASK TO YOUR FINANCIAL ADVISOR.

Rossari Biotech is one of the leading manufacturers of specialty chemicals for the textile space and caters to other categories such as home, personal care, animal health etc. with a list of top-notch client base. With exposure to over 17 foreign countries, Rossari has expanded to local as well as global markets to mark its presence in the competitive landscape.

"A robust management and sound corporate governance policy will drive growth going forward and this is already visible in its current return ratios (RoCE 25 percent and RoNW of 32 percent in FY20). Since its P/E is slightly overvalued at 31x compared to average P/E of 27x, short term investors can subscribe only for listing gains. However, for long term investors can hold on to this stock as it is still a fair deal because the handsome growth and strong book with a mere 0.3 Debt/equity ratio and sufficient cash still justify the valuation," Nirali said.

According to her, one major risk could be its dependence on the textile space, however, they are trying to reduce this exposure eventually (textiles formed 71.54 percent of its revenue in FY18 which is 43.71 percent in FY20). "This is a big positive."

As on May 31, 2020, Rossari Biotech had a range of 2,030 different products sold across these categories. The company manufactures majority of its products in-house from their manufacturing facility at Silvassa (which has 1.2 lakh MTPA capacity) and currently it is setting up another manufacturing facility at Dahej in Gujarat with a proposed installed capacity of 1,32,500 MTPA.

It has pan India distribution network through 204 distributors and 17 countries through 29 distributors with operations in India as well in 17 foreign countries including Vietnam, Bangladesh and Mauritius.