The initial public offering (IPO) of Surat-based speciality chemicals manufacturer Ami Organics opened for subscription on Wednesday. The company’s Rs 570 crore IPO will be open for subscription till Friday.

Analysts remain optimistic about the company’s IPO, given the track record of speciality chemicals manufacturers that were recently listed on the stock markets.

Decoded: Why so many companies are going public in 2021

IMPORTANT DETAILS ABOUT AMI ORGANICS IPO

The price band for the public issue has been fixed at Rs 603-Rs 610. The minimum lot size for the IPO is 24 shares and in multiples thereof. An investor can bid for a maximum of 13 lots.

Ami Organics IPO comprises a fresh issue worth Rs 200 crore and an offer for sale of Rs 369.64 crore. At the upper price band, the issue size is worth Rs 569.64 crore. It may be noted that the company has raised over Rs 170 crore from anchor investors on Tuesday.

At least 35 per cent of the IPO has been set aside for retail investors while 50 per cent portion has been reserved for Qualified Institutional Buyers (QIBs) and the remaining 15 per cent for non-institutional investors.

After the subscription ends, the share allotment for the public issue is expected to be finalised by September 8 and refunds to ineligible investors will be made a day later. Eligible investors will get the shares credited to their demand accounts on September 13, just a day before its expected listing on the stock market.

The company’s shares are performing well on the Grey Market, where unlisted shares trade before they are official stock market debut. As of today, the grey market premium (GMP) of the IPO is over Rs 160. The IPO’s GMP has seen a sharp rise since yesterday when it increased from Rs 50 to Rs 125.

The company manufactures speciality chemicals and has developed over 400 pharma intermediaries for active pharmaceutical ingredients (APIs) across 17 therapeutic areas. Ami Organics had seen a 41 per cent jump in revenue in FY21 and net profit grew 96 per cent.

SHOULD YOU SUBSCRIBE?

Analysts remain optimistic about the company’s IPO as they find the public issue reasonably priced. Analysts pointed out that R&D-based pharma companies and speciality chemicals manufacturing companies have witnessed a good run on the stock market.

Analysts added that the company has performed consistently in terms of financial and sales growth. Therefore, analysts are also optimistic about the long-term prospects of the company.

Some analysts suggest that profitability could be lower, compared to large listed pharma API companies and this could leave little room for upside from the IPO price. But most analysts still maintain a positive outlook, based on the broader market performance of the pharma API sector.

Choice Broking has given the IPO a ‘subscribe’ rating while Angel Broking maintained a ‘neutral’ rating. Marwadi Shares and Finance have also given a ‘subscribe’ rating to the IPO.

Ami Organics IPO opened for subscription along with Vijaya Diagnostics. As per analysts, Ami Organics seems to be the winner out of the two public issues.

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