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About the Company

Ami Organics is one of the leading research and development (R&D) driven manufacturers of specialty chemicals. They are one of the major manufacturers of pharma intermediates (PI) for certain key active pharmaceutical ingredients including Dolutegravir, Trazodone, Entacapone, Nintedanib and Rivaroxaban, which are used in the treatment of retroviral, psychotic, cancer, Parkinson, depression, etc. Besides, the specialty chemicals that the company manufactures, find use in the agrochemicals and fine chemicals industry. Recently, Ami Organics, have acquired the business of Gujarat Organics Ltd (GOL) and 2 additional manufacturing facilities.

Since its inception, the company has developed and commercialized over 450 pharma intermediates for APIs across 17 key therapeutic areas. It has 3 manufacturing units located at Sachin, Ankleshwar and Jhagadia in Gujarat with an installed capacity of 6,060 MTPA. The company supplies its products to more than 150 customers directly in India and 25 countries overseas. Some of its domestic customers include Laurus Labs, Cadila Healthcare and Cipla while its key export customers include Organike s.r.l.a Socio Unico, Fermion Oy, Chori Co. Ltd., Medichem.S.A. and Midas Pharma GmbH.

Objects of the Issue

* Repayment/prepayment of certain financial facilities availed by the company;

* To meet working capital requirements;

* General corporate purposes.

Outlook & Valuation

The Indian chemicals market is valued at USD 166Bn in 2019 and contributes ~4% to the global chemical industry. Going ahead, the chemical market is expected to grow at a CAGR of ~12% and reach ~USD 326Bn by 2025. The specialty chemical industry forms ~47% of the domestic chemical market, which is expected to grow at a CAGR of ~11-12% over the same period. The growth will be driven by increasing demand from agrochemicals, pharmaceuticals, paints & coatings and the personal hygiene segment. Also, global players opting for China +1 strategy would benefit Indian players as they have strong technical capabilities and low-cost skilled labours.

Ami organics is well placed in the specialty chemical space with a diversified product portfolio across pharma, fine chemicals and agrochemical segments. Over the years, the company has established long-standing relationships with its key customers both in domestic and international markets which have helped in expansion as well as earning strong revenue. Further, the company aims to strengthen its R&D capabilities, continue to focus on cost efficiency and improving productivity and expand into new geographies. Besides, the company has 15,830 sqmtr land at its Jhagadia facility, so it would look for organic or inorganic expansion opportunities in the future. On the financial front, the company’s performance has been strong. From the long term perspective, we have a positive view on the company.

Key Risks:

* i) Operates under a highly regulated market.

* ii) All manufacturing facilities are located in a single state.

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SEBI Registration number is INZ000174330

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