Ami Organics, the Gujarat-based specialty chemicals manufacturer, said it will be using the proceeds of the upcoming initial public offer (IPO) for debt repayment, working capital requirements and expansion of business.
Ami Organics manufactures pharma intermediates for certain key APIs such as Dolutegravir (anti-HIV), Trazodone (anti-depression), Entacapone (used for treating Parkinson's disease), Nintedanib (anti-cancer) and Rivaroxaban (anticoagulant). The company has been able to gain significant market share on select intermediates over the years despite tough competition from Chinese suppliers, who dominate intermediate and APIs globally.
The company on August 27 announced its IPO. The price band of the offer has been fixed at Rs 603 to Rs 610 per equity share. The size of the issue at the upper price band is Rs 570 crore. The fresh issue is Rs 200 crore.
The offer will open on September 1 and close on September 3. Bids can be made for a minimum of 24 equity shares and in multiples thereafter.
The IPO comprises an offer for sale of up to 6,059,600 by certain investors.
The shares of the company are likely to be listed on the stock exchanges on September 14.
The company has already raised Rs 100 crore through pre-IPO placement.
Nareshkumar Patel, Chairman and Managing Director of Ami Organics, in an interview said Rs 140 crore will be used for debt repayment, which was taken largely to fund the recent acquisition of two additional manufacturing facilities. Patel added that Rs 90 crore will be spent in FY22 and FY23 for funding working capital requirements.
He said the company has developed and commercialised over 450 pharma Intermediates for APIs across 17 key therapeutic areas since inception.
The focus on R&D and continuous process improvement has positioned them as a preferred supplier to their customers. Ami Organics serves 150 customers across India and 25 countries. The company's manufacturing site in Sachin, near Surat, is audited by USFDA and received an establishment inspection report (EIR).
The revenue from operations for FY21 stood at Rs 340.61 crore, this was excluding Rs 100 crore revenues of acquisition Gujarat Organics. Pharma Intermediates business contributed about Rs 301.14 crore which is 88.41 percent of total revenues. Ami Organics grew 42 percent in FY21.
"We are a strong R&D driven company, .. we develop products very early; even when those products are in the clinical trial stage, we have commercialised 450 products, some of the patent expiries of those extend till 2030-2035. Whenever those products go off patent, we will be there as API suppliers," Patel said.
"That's the reason why we have been growing annually by over 20 percent," Patel added.Patel said that the China-plus-one strategy adopted by pharmaceutical companies in the procurement of raw materials is also positive for the company. The strategy refers to the practice of avoiding investing only in China and diversify the business into other countries.