Amy Organics issue subscribed 1.9 times in first day

Amy Organics Ltd’s initial share sale was oversubscribed nearly two times on Wednesday, the first of the three-day offering that closed on September 3, according to stock exchanges data.
The overall book was subscribed 1.90 times, excluding anchor allocation. As of 5 pm, the institutional category was subscribed 1.38 times, while the portion reserved for high net worth investors and retail investors was subscribed 41% and 2.83 times, respectively.
“The IPO is priced at 35.6x and has an EV/EBITDA of 25.7x over the upper price band of the IPO, which is on the higher side compared to the listed peer group. The company already has a high market share. API of 70%-90% which will limit the growth in the near future”, Angel Broking said in a note to its investors.
The IPO of specialty chemicals maker Amy Organics includes a recent issue of ₹200 crore and offer for sale of 6.06 million shares by its existing promoters and shareholders.
The OFS includes 7 lakh shares of Parul Chetankumar Vaghasiya, 1.5 lakh shares of Girishkumar Limbabai Chovatia, 3.05 million shares of Kiranben Girishbhai Chovatia, 1.74 lakh shares of Aruna Jayantkumar Pandya.
The price band is fixed at ₹603-610 per share and on the upper price band it will rise to approx. ₹570 crores.
The proceeds from the issue will be used for repayment of financial facilities up to ₹140 crores. The firm will also use up to ₹90 crores for financing working capital requirements. As of March 2021, it had a net debt of ₹218.73 crores.
Meanwhile, Vijaya Diagnostic has received a lukewarm response with a subscription of 30% on the first day of its issue. Institutional investors subscribed 23% while retail investors subscribed 46%.
The IPO consists of a net offer for sale of 35.69 million shares by its existing shareholders and promoters. The OFS includes 5.1 million shares by Dr. S Surendranath Reddy, 29.49 million shares by Karakoram Limited, 1.10 million shares by Kedara Capital Alternative Investment Fund – Kedara Capital AIF I. At the upper band price, the company plans to ₹1895.14 crores.
“Given a strong financial base and strong brand recall, we believe it is well positioned to grow in adjacent regions. Considering the growing diagnostics industry and the well-integrated model of the company , we have a positive outlook on the company. ₹531, EV/EBITDA comes in at 32.1x FY21 EBITDA which is lower than its listed peers despite having the highest margin,” Nermal Bang said in a note to its investors.