Ami Organics, specialty chemicals maker, IPO will open for subscription next week on 1 September and close on 3 September. The issue comprises a fresh issue of equity shares worth Rs 200 crore and an offer-for-sale (OFS) of up to 60.59 lakh equity shares, constituting up to 7 lakh shares by Parul Chetankumar Vaghasia, up to 15 lakh equity shares by Girishkumar Limbabhai Chovatia, up to 30.50 lakh shares by Kiranben Girishbhai Chovatia, up to 1.74 lakh shares by Arun Jayantkumar Panya, among others.
Ami Organics, in consultation with book-running lead managers, has undertaken a pre-IPO placement of equity shares worth Rs 100 crore. The size of fresh issue has been reduced by Rs 100 crore. The company in its draft red herring prospectus had mentioned the fresh issue of shares worth Rs 300 crore. This is the Ami Organics’ second attempt to go public. In 2018, Ami Organics had filed preliminary papers with SEBI and received the capital markets regulator’s approval to launch the initial public offering. However, it did not float the IPO.
Intensive Fiscal Services Pvt Ltd, Ambit Pvt Ltd and Axis Capital Ltd are the book running lead managers to the issue. Link Intime Private Ltd is the registrar to the issue. Upon successful listing, Ami Organics will join the likes of Aarti Industries, Hikal Ltd, Valiant Organics, Vinati Organics, Neuland Organics and Atul Ltd. The industry peer group P/E ratio stands at 48.91x and the weighted average return on net worth is 29.09 per cent.
Ami Organics has planned to utilise the net proceeds and the proceeds from the pre-IPO placement towards repayment of certain indebtedness availed by the company worth Rs 140 crore, funding working capital requirements of the company worth Rs 90 crore, and for general corporate purposes. The company derives a significant portion of its revenue from the sale of pharmaceutical intermediates used in active pharmaceutical ingredients (API), which primarily comprises the sale of products in the therapeutic areas of anti-psychotic, anti-retroviral, anti-cancer, anti-depressant, anti-Parkinson’s, anti-inflammatory and anticoagulant.
Recently, Ami Organics has completed the acquisition of two additional manufacturing plants operated by Gujarat Organics Ltd (GOL) in line with its inorganic growth strategy of foraying further into the specialty chemicals sector. Specifically, subsequent to the acquisition, it has acquired the preservatives (parabens and parabens formulations which have end usage in cosmetics, animal food and personal care industries) and specialty chemicals business of GOL (with end usage in inter alia the cosmetics, dyes and agrochemicals industries).