This Small Cap Chemical Company has Secured ₹1,697 Crore LOI, Boosting Order Book to ₹8,919 Crore

The Company Signs Agreement with US MNC for High-Performance Specialty Chemical Supply.

About Company

Anupam Rasayan India Ltd. (Anupam) is a leading Indian company specializing in custom synthesis and the manufacturing of specialty chemicals.  Established in 1984, Anupam operates across two primary verticals.  The first, Life Science Related Specialty Chemicals, encompasses products for the Agrochemical, Personal Care, and Pharmaceutical industries.  The second vertical, Other Specialty Chemicals, focuses on Specialty Pigments and Dyes, as well as Polymer Additives.

About contracts

Anupam Rasayan, a leading custom synthesis and specialty chemicals company, is pleased to announce two significant agreements related to the supply of a high-performance specialty chemical used in critical polymer applications.

First, the company has signed a Letter of Intent (LOI) with a US multinational, a global leader in science and innovation.  This LOI outlines a projected 10-year supply agreement with cumulative sales expected to reach $195 million (₹1,697 crore).  The product will be manufactured in Anupam Rasayan's existing facilities.

Second, Anupam Rasayan has signed a contract with another leading American chemical multinational, also a global leader in science and innovation, for the supply of the same high-performance specialty chemical. This agreement is valued at $12.5 million (₹108 crore) annually.

As of January FY25, Anupam Rasayan's total order book stands at ₹8,919 crore.  This represents the cumulative value of outstanding purchase orders for the company's products and services, indicating strong demand and future revenue visibility.

Industry Outlook

The global chemical industry faced challenges in FY24, including sluggish demand, high energy and raw material costs, and geopolitical uncertainties. Deloitte's 2024 Chemical Industry Outlook predicted a modest rebound in production, but by mid-2023, many companies revised their expectations due to channel inventory issues and potential recessions in Europe. The American Chemistry Council reported a 0.3% increase in global chemical production in 2023, with a projected 2.9% growth in 2024. The industry struggled with overcapacity in segments like petrochemicals, but innovation and technology advancements created new growth opportunities.

The regional competitive landscape shifted, with Europe facing high energy prices and regulatory pressures, while the United States benefited from lower costs and greater investment stability. The chemical industry is crucial in the energy transition, supporting over 75% of emissions reduction technologies needed to achieve net-zero goals by 2050. The specialty chemicals sector, valued at $285.4 billion in 2023, is projected to reach $364.8 billion by 2028, growing at a CAGR of 5%. As 2024 progresses, the industry outlook is cautiously optimistic, with modest improvements reported by chemical executives.

Future Outlook

Anupam is aiming for significant growth in its pharmaceutical portfolio, targeting a $15 billion Total Addressable Market (TAM). Key growth triggers include manufacturing key intermediates for new active pharmaceutical ingredients (APIs) sourced from Japan and the US, focusing on niche high-value molecules, developing and manufacturing import substitute key starting materials (KSMs), and manufacturing KSMs and intermediates for blockbuster molecules like Atorvastatin, Vonoprazan, Sitagliptin, Dapagliflozin, and Losartan.

Anupam also plans to expand its capabilities in fluorination chemistry, a key process in many high-value, high-margin pharmaceutical products. The company has a robust pipeline of 65+ pharmaceutical molecules in R&D and pilot stages, with 10+ commercialized and 6+ slated for commercialization in FY25. The company is targeting high-value polymer applications like semiconductors and flame retardants, targeting Japanese and global MNCs. The company's polymer products have significant revenue potential, with potential ranges of $40-70 million for Product B, $80-90 million for Product X/Y, and $100 million for Product M, indicating a significant market opportunity.

Disclaimer: This article is intended for informational purposes only and should not be considered as investment advice.