The pharmaceutical market in India was valued at $59 billion in 2020 and supplies over 50% globally for various vaccines.
The IPOs in the pharma sector have had the most successful track record in the grey market, hence trying its luck specialty chemicals maker, Ami Organics filed preliminary papers with capital markets regulator SEBI to float an initial share sale a few weeks ago.
The initial public offer (IРО) соmрrises fresh issue оf equity shares worth ₹300 сrоre аnd аn offer for sale оf up to 6.06 million shares by promoter аnd existing shareholders, ассоrding tо offer document filed with SEBI.
The company will utilize ₹140 crores from the IPO proceeds towards repayment of certain debt and ₹90 crores for funding working capital requirements.
Ami Organics is also planning for a pre-IPO placement of up to ₹100 crores, with the help of its book-running managers Intensive Fiscal Services Pvt Ltd, Ambit Pvt Ltd, and Axis Capital Ltd.
Specialty chemicals
Ami Organic’s focus is the development and manufacturing of advanced pharmaceutical intermediates(APIs) for regulated and generic active pharmaceutical ingredients, New Chemical Entities (NCE), and key starting materials for agrochemical and fine chemicals.
The Gujrat-based chemical company is one of the leading manufacturers of pharma intermediates for certain key APIs, including Dolutegravir, Trazodone, Entacapone, Nintedanib, and Rivaroxaban.
These intermediates find application in certain high-growth therapeutic areas including anti-retroviral, anti-inflammatory, anti-depressant, and anti-cancer, commanding significant market share both in India and globally.
The pharma intermediates used for manufacturing APIs and NCEs portfolio have expanded from over 425 products as of March 31, 2019, to over 450 products as of March 31, 2021. The company has also developed and commercialized these intermediates across 17 key therapeutic areas.
For the fisсаl year 2021, the соmраny reроrted а revenue оf ₹340.61 сrоre versus ₹239.64 сrоre а year аgо. Net рrоfit for the рeriоd stооd at ₹53.99 сrоre аgаinst ₹27.47 сrоre last year.
Meanwhile, Ami Organic’s manufacturing facilities are concentrated in a single state. Any social political or economic disruption or natural calamities may create a problem in the regular operations. This would have an adverse effect on business, financial condition, cash flows, and future business prospects.
The pharmaceutical market in India is expected to grow at a CAGR of 10% from 2020 to 2025, which can be very favorable for the growth of Ami Organics in the long run.