Ami Organics’ Rs 569.64 crore initial public offering (IPO) was subscribed 1.90 times on the first day of its issue, according to subscription data on the stock exchanges. The leading research and development-driven manufacturers’ IPO opened for bidding on Wednesday, September 1, and will close on Friday, September 3 – remaining open for investors for a period of three days. For the issue, the company has fixed the price band at Rs 603 – Rs 610 per share.
On Wednesday, retail individual investors showed greater interest as the portion reserved for them was subscribed 2.82 times – the highest among the three groups of investors. The portion set aside for the qualified institutional buyers or QIB was subscribed 1.39 times, while the portion reserved for non-institutional investors or NII was subscribed 0.40 times.
The public offer’s market lot size is 24 shares and a retail-individual investor can apply for up to 13 lots or 312 shares. Ami Organics is a leading research and development-driven manufacturer of specialty chemicals. It is involved in manufacturing different types of advanced pharmaceutical intermediates as well as active pharmaceutical ingredients (API). The company seeks to utilise the pre-IPO and fresh issue proceeds to repay debts and to meet its working capital requirements.
”At the higher end of the price band, Ami Organics is priced at a PE ratio of ~41 times FY21 EPS (on a fully diluted on post-issue basis). This is lower as compared to peers such as Aarti Industries (56 times), Vinati Organics (66 times).
While Ami Organics has reported higher RoNW numbers than these peers, the sustainability of superior financial performance is yet to be seen. However, the issue appears to be fully priced as compared to the industry average (~46 times).
Given factors such as good growth in bottomline, healthy margins, robust return ratios, high market share in key products we remain ‘positive’ on the long-term prospects of this issue,” SEBI-registered investment advisor INDmoney said in a report.