Ami Organics Limited had seen its initial public offering (IPO) close on September 3, 2021. This came after the three days of trading that the company went through with its public issue. The issue had opened on the public market to investors on September 1. Over the course of the three days, however, the company saw very robust participation from its investors. The investors had subscribed to the issue around 64.54 times towards the end of the third day. The Ami Organics IPO had received bids for 42.22 crore equity shares against its IPO size of 65.42 lakh equity shares as per the data on the exchanges.
The company had a total of three groups of investors for the issue, these investor groups were the qualified institutional buyers (QIBs), the non-institutional investors (NIIs) and the retail individual investors (RIIs). Out of all the three investor groups, the NII’s had subscribed to the issue the most at 154.81 times. The second-largest investors were the QIBs who had subscribed to the issue around 86.64 times over the course of the trading days. Lastly, were the RIIs who had seen a subscription of 13.36 times by the end of the public issue.
The company had an issue size of Rs 569.64 crore. This public issue consisted of an offer for sale (OFS) and a fresh issue. The OFS stood as 6,059,600 equity shares with a value of Rs 369.64 crore. The fresh issue on the other hand is Rs 200 crore. The company had previously managed to mobilise around Rs 171 crore from its anchor investors on August 31, 2021, which was a day before the issue had opened up for subscriptions. This was done at the upper end of the price band which sat at Rs 610 per equity share. The book-built issue had a price of Rs 603 to Rs 610 per equity share with a face value of Rs 10 per share.
The grey market premium (GMP) of the issue stood at Rs 135 per share, which indicated that the issue was trading shares at a premium of Rs 738 to Rs 745 per equity share on the grey market. These prices were the most recent ones on Monday as per the information on IPO Watch.
The issue plans to achieve its listing on September 14, 2021, though this is yet to be finalised. The company will seek its basis of allotment on September 8, following which, it will initiate the refunds to the unlucky bidders to failed to get a share. The fortunate ones who did snag a share during the trading days will see their shares accredited to their Demat accounts on September 13, 2021 – a day before the tentative listing date.
The issue was promoted by Nareshkumar Ramjibhai Patel, Chetankumar Chhaganlal Vaghasia, Shital Nareshbhai Patel and Parul Chetankumar Vaghasia. The company aims to use the proceeds of the IPO for the repayment and pre-payment of certain financial facilities availed by the company. The rest would go towards funding working capital requirements for the company as well as general corporate expenses.
Speaking on the diversification of the business going forward, ICICI Direct said, “It intends to pursue strategic acquisitions and partnerships to complement organic growth and internal expertise. The company also intends to develop internal capacities and production abilities to achieve intended levels of organic growth. It believes that by pursuing strategic acquisitions including the recently concluded acquisition of the business of GOL, it will add to capabilities and technical expertise or enter into partnerships to strengthen product infrastructure and overall manufacturing capabilities in the specialty chemicals sector.”
Talking about one of the major risks with this company, ICICI Direct added, “It does not have long term agreements with most raw material suppliers. The company’s inability to correctly forecast demand and supply may have a material adverse impact on working capital, business and results of operations.”
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