Shares of Ami Organics were up 20 per cent at Rs 1,121 on the BSE in intra-day trade on Wednesday after the specialty chemicals company made a strong market debut on Tuesday. With today’s rally, the stock has now gained a solid 84 per cent against in just two trading sessions from its issue price of Rs 610 per share.
Ami Organics is focused towards manufacturing of advanced pharma intermediates (PI) for regulated/generic APIs and New Chemical Entities (NCE) and key starting material for agrochemical and fine chemicals. The company has three manufacturing facilities situated in Gujarat with an aggregate installed capacity of 6060 Mtpa.
It is one of the major manufacturers of PIs like Dolutegravir, Trazodone, Entacapone, Nintedanib and Rivaroxaban of which first two contributed around 44 per cent of FY21 revenues.
The company intends to invest in development of products, which are used in manufacture of APIs being used in formulations whose patents are expiring, which would lead to increase in demand for pharma intermediates for such APIs. Additionally, recent acquisition of Gujarat Organics Ltd (GOL’s) business has now enabled it to manufacture certain products that are manufactured by the company in India like PHBA, Paraben derivatives and Cyano phenol, ICICI Securities said in IPO note.
“We like Ami Organics given its wide product portfolio in PIs, diversification efforts into other specialty chemical space, strong clients’ relation across geographies and robust financials. It is well placed to tap opportunity in the fast growing specialty chemical market by leveraging its strong R&D and expanding product portfolio,” Motilal Oswal Securities said.
Synergy benefits with GOL would start playing out from FY22 onwards and boost profitability. Post IPO, Ami Organics will become debt free. It enjoys healthy return ratios of around 18 per cent, it added.
At 10:41 am; the stock was trading 16.8 per cent higher at Rs 1,093 on the BSE, as compared to 0.47 per cent rise in the S&P BSE Sensex. A combined 3.9 million equity shares had changed hands at the counter on the NSE and BSE.