Ami Organics Ltd. will be the first IPO to hit the markets this month. The IPO will be open from September 1st to September 3rd. They aim to raise Rs. ₹569.64 crores through a public offering.
In this article, we look into important information on the Ami Organics Ltd. IPO and find out the possible prospects of the company. Keep reading!
Table of Contents
Ami Organics IPO Review – About the Company
Founded in 2004, Ami Organics Ltd. is a leading R&D driven manufacturer of speciality chemicals. The company manufactures products like Advanced Pharmaceutical Intermediates and Active Pharmaceutical Ingredients (API) for new chemical entities among other products used as material in agrochemicals and fine chemicals.
Over the years Avi Organics has developed a strong product portfolio. The company expanded its product portfolio from 425 products in 2019 to over 450 pharma intermediaries to be used across 17 therapeutic areas as of March 2021.
These therapeutic areas include anti-retroviral, anti-inflammatory, antipsychotic, anti-cancer, anti-Parkinson, anti-depressant, and anticoagulant among various others.
The company has 3 manufacturing facilities located in Sachin, Ankleshwar and Jhagadia in Gujarat. These facilities have an aggregate installed capacity of 6,060 MTPA.
In addition to this, they have recently acquired Gujarat Organics Limited (“GOL”).
This acquisition gives Ami Organics 2 manufacturing facilities which can add preservatives (parabens and parabens formulations for end usage in cosmetics, animal food and personal care industries) and other speciality chemicals for end usage in cosmetics, dyes polymers and agrochemicals industries) to their product portfolio.
The company has shown a good financial track record in the recent past. Avi Organics revenues from operations have grown at a CAGR of 19.50% during FY19-FY21. Its profits grew at a CAGR of 52.25% from FY19-FY21.
Their pharms intermediaries account for 88% of their revenues whereas speciality chemicals making up 5% of their revenues.
Ami Organics IPO Review – Customers
Ami Organics supplied its products to both domestic and international companies, totalling its customer base of 150. Its products are sold to over 25 countries including Europe, the USA, China, Israel, Japan, Latin America, etc. As of FY21 exports made up 51.57% of its sales.
Its international customers include
- Organike s.r.l.a. Socio Unico
- Fermion Oly
- Medichem S.A.
- Midas Pharma GmbH
Its domestic customers include
Ami Organics IPO Review – Competitors
Its listed competitors include
Ami Organics IPO Review – Grey Market Premium
The shares of Ami Organics traded at around a 7.5% premium in the grey market before the IPO. The shares traded at a price of Rs.653 – Rs.660 giving them a premium of Rs.50 over their issue price band of Rs 603-Rs.610 per share.
Ami Organics IPO Review – Key IPO Information
The promoters of the company are Nareshkumar Ramjibhai Patel, Chetankumar Chhaganlal Vaghasia, Shital Nareshbhai Patel and Parul Chetankumar Vaghasia.
They have appointed Intensive Fiscal Services Pvt. Ltd., Ambit Pvt. Ltd. and Axis Capital Ltd. as the book running lead managers to this issue. Link Intime India Pvt. Ltd. has been appointed as the registrar to the issue.
| Particulars | Details |
|---|---|
| IPO Size | ₹569.64 Cr |
| Fresh Issue | ₹200.00 Cr |
| Offer For Sale(OFS) | ₹369.64 Cr |
| Opening Date | Sep 1, 2021 |
| Closing Date | Sep 3, 2021 |
| Face Value | ₹10 per equity share |
| Price Band | ₹603 to ₹610 per equity share |
| Lot Size | 24 Shares |
| Minimum Lot Size | 1 |
| Maximum Lot Size | 13 |
| Listing Date | Sep 14, 2021 |
Ami Organics IPO Review – Purpose of the Issue
The proceeds from the IPO will be used for:
- Repayment/prepayment of certain financial facilities availed by our Company.
- Funding working capital requirements of our Company.
- General corporate purposes.
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In Closing
The IPO opens on 1st September and closes on 3rd September 2021. The Indian chemicals market was valued at $166 billion as of 2019 and is expected to grow to $326 billion by 2025.
In addition to this Indian speciality, companies may benefit from China plus one policy. Countries and MNCs around the globe are making an attempt to reduce their dependency on China post the Covid-19 outbreak further benefiting India.
For retail investors, it can be a good opportunity to look into the company’s future prospects and apply for the IPO if they believe in the products and growth prospects of Ami Organics as the domestic chemical market is expected to grow at a CAGR of 11-12%.
That’s all for this post. Do let us know what you think of the Ami Organics IPO review. Are you planning to apply for this IPO or not? Comment below. Cheers!
Aron, Bachelors in Commerce from Mangalore University, entered the world of Equity research to explore his interests in financial markets. Outside of work, you can catch him binging on a show, supporting RCB, and dreaming of visiting Kasol soon. He also believes that eating kid’s ice-cream is the best way to teach them taxes.
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