Ami Organics makes strong debut, lists at 49% premium over issue price

Post listing, the stock hit a high of Rs 929 and a low of Rs 841 in intra-day trade

Specialty chemicals company Ami Organics made a strong stock market debut as its shares opened at Rs 910, a 49 per cent premium over its issue price of Rs 610 per share on the National Stock Exchange (NSE). On the BSE, the stock opened at Rs 902, 48 per cent higher than its issue price.

Post listing, the stock hit a high of Rs 929 and a low of Rs 841 on the NSE and BSE in intra-day trade. At 10:02 am, it traded at Rs 902.70, up 48 per cent against its issue price on the BSE. A combined 3.7 million equity shares had changed hands on the counter on the NSE and BSE at the time of writing this report.

The initial public offer (IPO) of Ami Organics, which was a mix of an offer for sale of Rs 370 crore and a fresh issue worth Rs 200 crore, was priced in the band of Rs 603 - 610 per share. The issue received a strong response from the investors and was subscribed 64.54 times. Qualified Institutional Buyers (QIBs) category was subscribed 86.64 times, non-institutional investors 154.81 times and Retail Individual Investors (RIIs) 13.36 times.

The company plans to utilise the proceeds raised from the fresh issue for repayment or prepayment of certain financial facilities, funding working capital requirements and general corporate purposes.

Ami Organics is a leading Research & Development driven company. It deals in different types of Advanced Pharmaceutical Intermediates and Active Pharmaceutical Ingredients (API) and materials for agrochemical and fine chemicals. The company has three manufacturing facilities situated in Gujarat with an aggregate installed capacity of 6060 Mtpa.

Ami Organics has over 450 pharma intermediates across 17 key therapeutic segments. It directly supplies its products to over150 customers in India and 25 countries i.e. Europe, the USA, China, Israel, Japan and Latin America. It has a coveted customer base, including companies like Laurus Labs, Cadila Healthcare and Cipla in the domestic markets and Organike S.r.l. a Socio Unico, Fermion Oly, Medichem S.A. and Midas Pharma GmbH in the international markets.

Most of the brokerage houses had assigned subscribe rating on the stock, citing impressive financial performance over the past two years. “Looking ahead, the company is expected to see healthy growth led by recent acquisitions, which led to increase in its installed capacity by 2.7x in FY21, despite which its balance sheet remains comfortable with D/E ratio of 0.8x. Further, debt reduction post-fundraising and healthy business opportunities are likely to result in healthy earnings growth in the ensuing years,” Reliance Securities had said in the IPO note.

Ami organics is well placed in the specialty chemical space with a diversified product portfolio. Over the years, the company has established long-standing relationships with its key customers both in domestic and international markets which have helped in expansion as well as earning strong revenue. On the financial front, the company’s performance has been strong. From the long-term perspective, we have a positive view on the company, analysts at Religare Broking said.