CRISIL Places Anupam Rasayan on Rating Watch Negative Following Jayhawk Acquisition

Anupam Rasayan India Limited has been placed on Rating Watch with Negative Implications by both India Ratings and Research (Ind-Ra) and CRISIL Ratings following the company's announcement to acquire Jayhawk Fine Chemicals LLC for USD 150.00 million.

CRISIL Rating Action Details

CRISIL Ratings has placed its ratings on the bank facilities of Anupam Rasayan India Limited on Rating Watch with Negative Implications. The rating action affects total bank loan facilities worth ₹1,369.82 crores.

Rating Component	Amount	Current Rating	Rating Action
Total Bank Loan Facilities	₹1,369.82 crores	CRISIL A/Watch Negative	Placed on Rating Watch
Long Term Rating	-	CRISIL A/Watch Negative	Negative Implications
Short Term Rating	-	CRISIL A1/Watch Negative	Negative Implications

India Ratings Action

India Ratings has simultaneously placed both the Long Term Issuer Rating and Bank Loan facilities on Rating Watch with Negative Implications pending clarity on the sustainable capital structure post-acquisition.

Rating Type	Size	Current Rating	Rating Action
Long Term Issuer Rating	-	IND AA-/Rating Watch Negative	Rating watch on
Bank Loan Facilities	₹1,196.10 crores	IND AA-/Rating Watch Negative/IND A1	Rating watch on

Acquisition and Funding Structure

Anupam Rasayan announced the acquisition of 100% equity in Jayhawk Fine Chemicals LLC, a US-based specialty chemical company, through a wholly owned US subsidiary. The acquisition will be funded through a structured approach combining debt, equity, and internal accruals.

Funding Component	Amount (USD Million)	Source
Initial Funding	40.00	ARIL's standalone internal accruals and/or debt raise
Remaining Funding	110.00	Class B non-voting shares issuance in new US subsidiary
Total Purchase Price	150.00	Combined funding sources

Jayhawk generated revenue and EBITDA of USD 78.00 million and USD 15.00 million respectively, with net cash of USD 16.00 million. The acquisition translates to an enterprise value of USD 134.00 million, indicating an EV/EBITDA multiple of around 9x.

Financial Performance and Working Capital Challenges

Anupam Rasayan has demonstrated signs of operational recovery with significant revenue improvement. The company's consolidated quarterly revenue improved to ₹731.40 crores in Q2 from ₹485.80 crores in Q1.

Performance Metric	1H Current	1H Previous Year	Growth
Consolidated Revenue	₹1,217.00 crores	₹548.00 crores	122% YoY
Consolidated EBITDA	₹260.10 crores	₹133.60 crores	Doubled
EBITDA Margin	21.30%	27.67%	Declined

The company continues to face elevated working capital challenges with gross current assets (GCAs) at around 646 days as of March, compared to 530 days in the previous fiscal. Bank limit utilization remained high at over 90% as of September.

Liquidity and Capital Structure

Despite working capital challenges, the company maintains strong liquidity supported by net cash accrual of ₹280-350 crores against nil debt obligation. Cash and equivalents stood at more than ₹413.00 crores as of September.

Financial Metric	Current	Previous Year	Status
Net Working Capital	₹1,426.40 crores	₹1,608.90 crores	Improved
Cash and Equivalents	₹413.00 crores	₹128.20 crores	Strengthened
Bank Limit Utilization	92%	-	High but manageable

Rating Outlook and Resolution Timeline

Both rating agencies will resolve the rating watch upon completion of the transaction and receiving clarity on the capital structure. CRISIL Ratings will continue to monitor the management and resolve the watch once it obtains clarity on the funding of the acquisition and the intensity of working capital requirement.

The final terms of debt raise and Class B non-voting share issuance are likely to be finalized over the next few months. The rating agencies will evaluate the final terms to determine their classification as debt or equity, which will critically influence ARIL's leverage and liquidity profiles going forward.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.99%	+2.00%	+19.28%	+17.66%	+81.17%	+153.11%

Anupam Rasayan India Limited , a leading specialty chemicals company, has announced a strategic move to strengthen its presence in the United States market. The company's board has approved the acquisition of Monitchem Kansas S.àr.l and its subsidiaries, including Jayhawk Fine Chemicals Corporation, for up to USD 155 million from CABB Europe GmbH.

Acquisition Details

Target: Monitchem Kansas S.àr.l and subsidiaries
Seller: CABB Europe GmbH
Maximum Deal Value: USD 155 million
Key Subsidiary: Jayhawk Fine Chemicals Corporation

Strategic Implications

This acquisition is set to bolster Anupam Rasayan's manufacturing capabilities in the United States, providing the company with:

Access to niche chemical manufacturing capabilities
An established American customer base
Strengthened strategic manufacturing footprint in the US

About Jayhawk Fine Chemicals

Jayhawk Fine Chemicals Corporation, a key component of this acquisition, is a specialty chemical company with its manufacturing facility based in Galena, Kansas. The company specializes in:

Custom manufacturing (CDMO) of fine chemicals
Advanced intermediates
Active ingredients

Jayhawk's expertise lies in complex, multi-step chemical synthesis for the agrochemical, specialty chemical, and performance materials industries.

Financial Perspective

To put this acquisition in context, let's look at Anupam Rasayan's recent financial position:

Financial Metric	FY 2025 (in ₹ crore)	YoY Change
Total Assets	5,268.90	14.50%
Current Assets	2,573.00	15.56%
Fixed Assets	2,184.50	45.50%
Total Equity	3,081.70	5.15%

The significant increase in fixed assets (45.50% YoY) suggests that Anupam Rasayan has been investing in its production capabilities. This acquisition aligns with that growth strategy, potentially adding substantial manufacturing assets to the company's portfolio.

Outlook

This acquisition marks a significant step in Anupam Rasayan's international expansion strategy. By gaining a foothold in the US market through Jayhawk Fine Chemicals, the company is positioning itself to:

Diversify its geographical presence
Enhance its product offerings in specialty chemicals
Potentially increase its market share in the agrochemical and performance materials sectors

Investors and industry observers will be keen to see how Anupam Rasayan integrates these new assets and leverages them to drive growth in the coming years.

As the chemical industry continues to evolve, strategic acquisitions like this one may play a crucial role in shaping the competitive landscape and driving innovation in specialty chemical manufacturing.