Shares of specialty chemicals maker Ami Organics Ltd on Tuesday listed with a huge premium of over 49 per cent against its issue price of Rs 610.
The stock made its debut at Rs 902, registering a gain of 47.86 per cent from its issue price on the BSE. It then jumped 52.29 per cent to Rs 929.
At the NSE, the specialty chemicals maker got listed at Rs 910, reflecting a premium of 49.18 per cent.
The Rs 569.63-crore initial public offer of Ami Organics was subscribed 64.54 times earlier this month.
Its price range was at Rs 603-610 per share.
The net proceeds of the Fresh Issue, and the proceeds from the Pre-IPO Placement are proposed to be utilised in the following manner towards repayment/prepayment of certain financial facilities availed by Company; and towards funding working capital requirements of Company; besides general corporate purposes
Axis Capital, Ambit Pvt Ltd and Intensive Fiscal Services Pvt Ltd have been appointed as merchant bankers to advise the company on the IPO.
This is the company's second attempt to go public. Earlier, Ami Organics had filed preliminary papers with Sebi in 2018 and had received the regulator''s nod to launch the public issue. However, it did not float the IPO
Ami Organics is one of the leading R&D driven manufacturers of specialty chemicals with varied end usage, focussed towards 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 agrochemicals and fine chemicals.
It has an experience of over 15 years of developing, manufacturing and commercialising advanced pharma intermediates used for manufacturing API and NCE in India and overseas.
The company hasdeveloped and commercialised over 450 Pharma Intermediates across 17 key therapeutic areas since inception and NCE, which are being supplied to over 150 customers in India and 25 countries overseas.
Some of the key therapeutic areas catered to by company include anti-retroviral, anti-inflammatory, anti-psychotic, anti-cancer, anti-Parkinson, antidepressant and anti-coagulant.
Ami Organics cater to domestic and certain multi-national pharmaceutical companies which cater to the large and fast growing markets of Europe, China, Japan, Israel, UK, Latin America and the USA. The company supplies products to 25 countries and have long standing relationships with numerous domestic and global pharmaceutical companies. Specifically, company cater extensively to the large geographies of Italy, Finland, France and China, which contributed to 35.47 percent, 17.67 percent,10.55 percent and 9.45 percent respectively, of company’s total revenue from exports for Fiscal 2021.
The company’s exposure to a risk of concentration, enabling it to further diversify and expand its business relationships. Some of company’s domestic customers includes Laurus Labs Limited and Cipla Limited and its export customers includes Organike s.r.l.a Socio Unico, Fermion Oy, Fabbrica Italiana Sintetici S.p.A, Chori Co. Ltd., Medichem S.A. and Midas Pharma GmbH
It has incurred significant indebtedness of Rs 1,463.98 million as of June 30, 2021. The secured borrowings of company as at 31 March 2021, 31 March 2020 and 31 March 2019 were Rs 1,278.15 million, Rs 521.05 million and Rs 434.04 million, respectively and the unsecured borrowings of company as at 31 March 2021, 31 March 2020 and 31 March 2019 were Rs 88.21 million, Rs 73.14 million and Rs 105.00 million, respectively.
Valuation
The company is bringing the issue at price band of Rs 603-610 per share at p/e multiple of 41 on post issue FY21 basis. With company’s plans to invest in development of products used in manufacture of APIs being used in formulations whose patents are expiring, increase in demand for the Pharma Intermediates for such APIs can be seen. Additionally, recent acquisition of GOL’s business will also be growth driver of company going forward.
Hem Securities said, it recommends “Subscribe” on issue.
