Ami Organics dazzles on its stock market debut, lists at a premium of 50%

• Shares of Ami Organics listed on the stock exchanges at ₹910 per share, which is 50% higher than the issue price.
• The company’s initial public offer (IPO) was oversubscribed by over 64 times.
• It intends to use a bulk of the proceeds of the IPO towards repaying its debts.

Shares of Ami Organics, one of the two new companies to get listed on the Indian stock exchanges, debuted at ₹910 per share, which is 50% above its issue price of ₹610.

The specialty chemical maker floated its ₹570 crore initial public offer (IPO) earlier this month. The IPO was oversubscribed by 64 times, with non-institutional investors leading the fray.

With the IPO proceeds, the Gujarat-based specialty chemicals company will pay off its debt worth ₹140 crore and become debt free, Naresh Patel, chief managing director of Ami Organics, said in an interview with Business Insider.

Over the last few months, several specialty chemicals companies debuted on the stock exchanges, receiving a mixed response. While Clean Science and Technology and Tatva Chintan Pharma received a good response, the market was not excited about Chemplast Sanmar and Anupam Rasayan.

As of 2:15 p.m., Ami Organics’ shares were trading at ₹930 per share, which is up by over 52%.

The grey market premium for Ami Organics’ shares was hovering around ₹150, which translates to approximately 25% of the issue price of ₹610. It is worth noting that the grey market premium is not an official measure of market premium.

Ami Organics is a research and development driven manufacturer of speciality chemicals. The company manufactures different types of advanced pharmaceutical intermediates and active pharmaceutical ingredients (API) for new chemical entities, and material for agrochemicals and fine chemicals.

The company is also working on cutting down raw material dependence on supplying countries like China. It imported 19.39% of total raw material purchase from China in FY21 as compared to 21.85% in FY20 and 22.11% in FY19.

“We have been strategically working on cutting down raw material dependence on one single country like China. I hope we can pull it down below two digits in the coming years,” said Patel.

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