Ami Organics Ltd. IPO details – Date, Price, Size, Allotment Status, Subscription

IPO-Note	Ami Organics Limited
Rs 603- Rs 610 per equity share	Recommendation: Subscribe

Company Profile: –

Ami Organics is one of the leading research and development driven manufacturers of specialty chemicals with varied end usage, focused towards the development and manufacturing of advanced pharmaceutical intermediates for regulated and generic active pharmaceutical ingredients (APIs), new chemical entities (NCEs) and key starting material for agrochemical and fine chemicalsThe Pharma Intermediates which they manufacture, find application in certain high-growth therapeutic areas including anti-retroviral, anti-inflammatory, anti-psychotic, anti-cancer, anti-Parkinson, anti-depressant and anti-coagulant, commanding significant market share both in India and globally.It has three manufacturing units namely Sachin facility, Ankleshwar facility and Jhagadia facility in Gujarat.Ankleshwar and Jhagadiafacilities had been acquired in March, 2021 from Gujarat Organics Ltd pursuant to a business transfer agreement.

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Issue Details
Objects of the issue	· Repayment/prepayment of certain financial facilitiesavailed by the company · Funding working capital requirements of the company · General corporate purposes.
Issue Size	Total issue Size – Rs. 569.6Cr. Offer for Sale – Rs. 369.6Cr. Fresh Issue – Rs. 200 Cr
Face value	Rs. 10.00 Per Equity Share
Issue Price	Rs. 603 – Rs. 610
Bid Lot	24 shares
Listing at	BSE, NSE
Issue Opens:	1st Sep, 2021 – 3rd Sep, 2021
QIB	50% of Net Issue Offer
Retail	35% of Net Issue Offer
NIB	15% of Net Issue Offer

Financial Performance:

 

 

Shareholding Pattern:

Shareholding Pattern	Pre- Issue	Post Issue
Promoters & Promoter Group	47.23%	41.05%
Public	52.78%	58.95%

 

Strengths:

• Strong and diversified product portfolio with 450+ Pharma Intermediates across 17 therapeutic areas.
• One of the leading manufacturers of Dolutegravir, Trazodone, Entacapone, Nintedanib and Rivaroxaban.
• High entry barriers in the chemicals manufacturing industry in which the Company operates.

Key Highlights:

• Revenue from operations grew at a CAGR of 19.5% between FY19 and FY21.
• The sales turnover for FY21 from the 2 plants acquired as part of the recent AcquisitionwasRs. 106.04Crore.
• EBITDA Margin was 23.53% in FY21 vs 17.52% in FY20
• Pharma Intermediates contributed 88.41% while the Specialty Chemicals contributed 4.87% to the total sales in FY21. 51.57% revenue of the company comes from exports.
• It has issued bonus shares in the ratio of 2 for 1 in March 2021.
• CFO/PAT stands at 0.5 in FY21 due to increased trade receivables

Risk Factors:

• Derives a significant portion of its revenue from the sale of products in certain therapeutic areas, particularly from Trazodone and Dolutegravir
• Business is working capital intensive and may adversely affect business
• Do not have any long-term fixed contract with majority of its customers and suppliers.Import of raw materials from China was 19.4% of revenue in FY21

Outlook:

Ami Organics is one of the leading manufacturers of Pharma Intermediatesfor certain key APIswith a market share of 80-90% in Trazodone intermediates in chemicals portfolio has expanded to include capabilities to manufacture preservatives and other specialty chemicals which are used in the manufacturing of cosmetics, dyes, polymers and agro-chemicals.The expansion will help them building synergies going forward. The global chemicals market was valued at $4,738 billion in 2019 and is expected to grow at a CAGR of 6.2% to $6,785 billion from 2019 – 2025. With the IPO Proceeds the company aims to become debt free by paying total debt of Rs. 140 Crore. At the higher price band of Rs 610, the offer is made at P/E multiple of 41.16 times on Post Issue equity basis. Some of theListed industry peersof the company are Aarti Ind., Hikal Ltd., Valiant Organics, Vinati Organics, Neuland Labs and Atul Ltd. They are currently trading at a P/E of 56.49, 47.32, 29.98, 66.14, 28.97 and 39.67 respectively, which is in line with the industry.Werecommend Subscribe to the IPO for longer termperspective.

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