Updated: September 2, 2021 9:38:01 am
Ami Organics IPO: The initial public offering (IPO) of specialty chemicals manufacturer Ami Organics opened for subscription on Wednesday, September 1, 2021, at a price band of Rs 603-610 per share. The offer will be available till Friday, September 3, 2021.
Through the offer, Ami Organics aims to raise nearly Rs 570 crore with the help of a fresh issue of equity shares worth Rs 200 crore and an offer for sale of up to 60,59,600 equity shares by existing shareholders. The company has reduced its fresh issue size to Rs 200 crore from Rs 300 crore after raising Rs 100 crore in a pre-IPO placement.
Ami Organics is one of the leading R&D driven manufacturers of speciality chemicals with varied end usage, focussed on the development and manufacturing of pharma intermediates for regulated and generic APIs (active pharmaceutical ingredients) and NCE (new chemical entity) and key starting material for agrochemical and fine chemicals.
The company said that the net proceeds from the fresh issue will be used towards repayment of certain debt and funding working capital requirements.
Half of the issue size is reserved for qualified institutional investors, 35 per cent for retail investors and the rest 15 per cent for non-institutional investors.
Investors who wish to subscribe to the Ami Organics IPO can bid in a lot of 24 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,640 to get a single lot of Ami Organics. The shares will be listed on both BSE as well as the National Stock Exchange (NSE).
The applicants also must note that the cut-off time for UPI mandate confirmation is Monday, September 6, 2021, upto 12:00 pm. If they fail to do so then their application may not be considered.
Intensive Fiscal Services Private Limited, Ambit Private Limited and Axis Capital are the book running lead managers to the IPO while Link Intime India is the registrar of the issue.
Before heading into the IPO, Ami Organics raised nearly Rs 171 crore (Rs 1,70,89,05,850) from 20 anchor investors in lieu of 28,01,485 equity shares at Rs 610 each, data from the stock exchanges showed.
The anchor investors include the likes of SBI Life Insurance Company, Kotak Mahindra Life Insurance Company, Aditya Birla Sun Life Insurance Company, Kuber India Fund, UTI Mutual Fund, Sundaram MF and SBI Mutual Fund among others.
The research teams at Anand Rathi Share and Stock Brokers and Motilal Oswal Financial Services in their respective IPO notes have recommended a “Subscribe” to the offer.
Motilal Oswal Financial Services in its IPO report said, “We like AOL given its wide product portfolio in PIs, diversification efforts into other specialty chemical space, strong clients’ relation across geographies and robust financials. It is well placed to tap opportunity in the fast growing specialty chemical market by leveraging its strong R&D and expanding product portfolio. The issue is reasonably valued at 41.2x FY21 P/E on post issue basis (avg. peer FY21 P/E of 45x), while it enjoys higher growth. We believe that the market would like to give premium valuation to such niche stories. Recommend Subscribe for Listing Gains.”
Anand Rathi Research in its report noted, “The company is available at the upper end of the IPO price band at 41.2x its FY21 earnings, with a market cap of Rs 22,227 million. Further on FY21 earnings basis the company is trading below the Industry average of 48.91x. Looking at the P/B ratio on the upper price band, book value and P/B are Rs 53 and 11.51x respectively along with a RoNW of 32.35 per cent.
The company has shown consistent financial performance with sales growth at CAGR of 19.5 per cent and restated profit after tax growth at CAGR of 52.3 per cent between the Fiscals 2019 and 2021. The financials for 2020-21 doesn’t include revenue from the acquisition of the two plants. We are positive on the long-term prospects of the Company. Hence, we recommend a “Subscribe” rating to this IPO.”
The share allotment is likely to take place on September 8, 2021, and the shares are expected to be listed on September 14, 2021, according to the timeline given in the red herring prospectus (RHP).
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