Ami Organics IPO: The Rs 570 crore IPO of specialty chemical maker Ami Organics will open for subscription on September 1. In the primary market, its shares reached a premium of Rs 122 against the issue price. Its price band is Rs 603-610 per share. Its shares are at a price of Rs 732 in the gray market, which is about 20 percent according to the upper price of the price band. Following the success of the IPO, Amy Organics will join the league of Aarti Industries, Hikal, Valiant Organics, Vinati Organics, Newland Organics and Atul.
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This is not the first time the company is trying to bring an IPO. Earlier, Amy Organics had submitted papers with SEBI in 2018 and SEBI had also approved. However, the company did not take out the IPO. This time on the advice of the book running lead managers, Amy Organics has done a pre-IPO placement of equity shares worth Rs 100 crore. In such a situation, the size of the IPO has come down by Rs 100 crore. Earlier, the company had talked about issuing shares worth Rs 300 crore in the draft Red Herring Prospectus (DRHP).
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Issue related details
- This IPO will be open for subscription from 1-3 September.
- Under this IPO of Rs 569.64 crore, the price band for shares with face value of Rs 10 has been kept at Rs 603-610 per share.
- The lot size of 24 shares has been fixed for the issue i.e. according to the upper price of the price band, investors will have to invest at least Rs 14640.
- The allotment of shares can be done on September 8 and its listing in the market can be done on September 14.
This is the opinion of experts regarding investment
AmI Organics is a leading manufacturer of Pharma Intermediates used in Active Pharma Ingredients (APIs). According to analysts, in the last financial year 2021, 25 percent ROCE (Return on Capital Employed) and 32 percent RoE (Return on Equity) which is satisfactory. Apart from this, the company’s capacity utilization level stood at 63 per cent, which may increase after the recent acquisition of facilities at Ankleshwar and Jhagadia. According to Abhay Doshi, Founder, UnlistedArena.com, it will have a P/E of 41.16 after the issue, which is moderate in terms of pricing. In such a situation, due to strong product portfolio and better market share, it can be invested for long term.
The major domestic customers of Amy Organics are Laurus Labs, Cadila Healthcare and Cipla. Its overseas clients include Socio Unico, Fermione, Medichem SA and Midas Pharma. Based on EPS (earnings per share) of Rs 14.82 in FY21, the company may get listed at P/E of 41.16x with market cap of Rs 22,22.70 crore while Aarti Industries P/E of 54.20x and Hikal 46.13x But trading is going on. In view of this, Saurabh Joshi, Analyst, Marwari Shares and Finance, has given a subscribe rating to this IPO due to the company’s superior and diversified product portfolio, strong R&D.
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