IPO: Ami Organics Limited

THE INVESTMENT AND EQUITY RESEARCH CLUB

Issue opens from 01-Sep-2021 to 03-Sep-2021 Sector: Specialty Chemical

Business Overview Issue Snapshot

Ami Organics Ltd. (AOL) Is a leading R&D driven manufacturer of Issue Open 01-Sep-2021
specialty chemicals with varied end usage; primarily focused on Issue Close: 03-Sep-2021
development of pharmaceutical APIs and New Chemical Entities
(NCEs). The APIs it manufactures find application in certain high- Issue Price: Rs. 603 – Rs. 610 per share
growth therapeutic areas commanding significant market share Lot Size: Multiples of 24 shares
both in India and globally. AOL has developed and commercialised
Fresh Issue – Rs. 200 Cr
over 450 Intermediates for APIs across 17 key high margin, high Offer Size:
OFS – Rs. 370 Cr
growth therapeutic areas since inception. It supplies to more than
150 customers (including international customers in 25 countries).
Key customers include Laurus Labs, Cadila Healthcare, Cipla etc. Offer Breakup
Issue Size (Cr)
Key Financials Categories Allocation
Lower Band
(in Cr.) FY’19 FY’20 FY’21
QIB: 50% 285
V O YA G E C A P I TA L – I P O N O T E

Income 238.5 239.6 340.6

NII: 15% 85.5
PAT 23.5 27.6 54.4
Retail: 35% 199.5
EBITDA(%) 17.8% 18.3% 24%
ROCE(%) 37% 29% 31% Employees - -
RONW (%) 29% 25% 33%
Tentative timetable
Investment Rationale
Allotment: 08-Sep-2021
▪ Company has good expansion plans as it recently acquired 2
manufacturing facilities from Gujarat Organics Limited Initiation of Refund: 09-Sep-2021

▪ Global presence (> 25 countries) with a diversified customer Listing: 14-Sep-2021

base across various industries having high entry barriers
IPO Lead Managers
▪ Having strong R&D capabilities, It owns a diversified specialised Lead Ambit Private Limited
product portfolio requiring strong technical know-how Managers: Axis Capital Limited
Intensive Fiscal Services Pvt Ltd.
▪ With an experienced and dedicated Management Team, it has
delivered consistent financial performance Registrar: Link Intime India Pvt Ltd.
Key Risks Objective of the issue
▪ Significant portion of the revenue comes from the products in ▪ Repayment/prepayment of certain financial
certain therapeutic areas and any reduction in demand for these facilities availed by the Company (Rs. 140 Cr)
products would affect the financials significantly
▪ Funding working capital requirements of the
▪ Failure to comply with the quality standards and technical company (Rs. 90 Cr)
specifications may lead to loss of business and impact reputation ▪ General corporate purposes.
▪ AOL does not have long-term agreements with suppliers for raw
Broker Outlook
materials. Any shortfall in the supply of raw materials or an
increase in raw material cost, may adversely affect the margin Brokers have stayed with a “Neutral” view for
the issue for both; listing gains and long-term
Major listed peers by considering various factors like health of
balance sheet, recent low EBITDA margin
Company P/E ROE ROCE acquisitions and mid-range valuation of 35.6x
Ami Organics Ltd.* 35.6x* 33% 31% EPS FY21 basis
Neuland Laboratories 28.1x 9.47% 11.4% Summary of Broker Ratings
Valiant Organics 29.9x 26.2% 27.9%
Angel Broking: NEUTRAL
Source: Draft Red Herring Prospectus, (*)Equity research
Disclaimer: Voyage capital provides the IPO Note with an intention to provide market knowledge. The Ventura Securities: SUBSCRIBE
IPO Note should not any in manner be considered as a sign of the club's endorsement for the IPO. The
club takes no responsibility for the outcome of the IPO Axis Capital NEUTRAL

01 September 2021 VOYAGE CAPITAL - THE INVESTMENT AND EQUITY RESEARCH CLUB, IIM INDORE IPO – Note