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Ami Organics IPO: Management says only one promoter selling 2% equity in OFS

Ami Organics IPO comprises a fresh issue of equity shares worth Rs 200 crore and an offer for sale (OFS) of up to 60,59,600 equity shares. The company has reduced its fresh issue size to Rs 200 crore from Rs 300 crore after raising Rs 100 crore in pre-IPO placement. The proceeds will be used for certain financial facilities and for funding the working capital requirements of the company.

Specialty chemicals maker Ami Organics, on Tuesday, said it has fixed a price band of Rs 603-610 per share for its Rs 570-crore initial share sale. The three-day initial public offer (IPO) will open on September 1 and conclude on September 3.
The IPO comprises a fresh issue of equity shares worth Rs 200 crore and an offer for sale (OFS) of up to 60,59,600 equity shares. The company has reduced its fresh issue size to Rs 200 crore from Rs 300 crore after raising Rs 100 crore in pre-IPO placement. The proceeds will be used for certain financial facilities and for funding the working capital requirements of the company.
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In an interview with CNBC-TV18, Abhishek Patel, CPO of Ami Organics, said, “We had acquired Gujarat Organics in FY21. So, all the growth you see in our financials in terms of revenue, which is 42 percent growth, is generated in the organic business only. Inorganic consolidation is not happening on the FY21 balance sheet. So, you can expect additional revenue and profitability out of this through an acquired business unit of Gujarat Organics from FY22 onwards only.”
The company is involved in developing and manufacturing of pharma intermediates for regulated and generic APIs and new chemical entities and also key starting materials for agro and fine chemicals.
In terms of dilution and primary issues, Patel said, “Since it is a Rs 300 crore total primary including the pre-IPO round, we are having Rs 140 crore for payment of debt and Rs 90 crore for our long-term working capital. In terms of OFS, let me tell you that we have an angel investor who invested in the company since 2004 and the investor along with their friends and relatives are offering their share for OFS. Promoter and promoter groups are largely not selling any share in this OFS, only 2 percent of the equity is offered by one promoter out of four in the OFS. So, promoters are largely into the business, they will remain in the business. They have the confidence to take it forward to the next level.”
On capacity utilisation, Patel said, “In terms of capacity utilisation, our capacity utilisation at the existing unit located at Sachin was 63 percent in FY21. So there is some headroom available in this facility. Plus, we acquired two business units from Gujarat Organics, which had capacity utilisation below 40 percent and that facility is fungible in nature to produce our existing product as well. So that gives us a very good headroom in terms of capacity.”
On capex, he said, “In terms of capex, there will be only regular kind of maintenance capex which is required for regular business only. Since we have acquired two business units just now, we have ample capacity for upcoming growth in the next two financial years.”
For full management commentary, watch the video.
-With PTI inputs