Vijaya Diagnostics and Ami Organics IPOs to raise Rs.2,465 cr

31st August 2021 - 10:15 pm

After a brief lull in the IPO markets, the action will return this week. Two IPOs; Vijaya Diagnostics and Ami Organics will open for subscription on 01-Sep, Wednesday and close on 03-Sep, Friday. Vijaya Diagnostics will entirely be an offer for sale while Ami Organics will be a combination of fresh issue and OFS.

Vijaya Diagnostics IPO

This South based diagnostic laboratory specializes in radiology and pathology testing. It is tapping the IPO market with an offer for sale of Rs.1,895 crore. The promoter Surendranath Reddy as well as Karakoram Fund and Kedaara Fund will take partial exit via OFS. The IPO has 50% allocation for QIBs, 35% for retail and 15% for HNIs. Retail investors can apply in minimum lots of 28 shares. The IPO price band is Rs.522-531.

Vijaya Diagnostic enjoys the robust ratio of B2C/B2B in the diagnostics industry at 93:7, which enabled better operating retention per customer and per test. Vijaya’s net margins and ROCE expanded sharply between FY19 and FY21. The IPO values the stock at 60 times P/E, which is better than industry standards.

Ami Organics IPO

Ami Organics is a Gujarat based pharma intermediates manufacturer with 3 plants at Sachin, Jhagadia and Ankleshwar. It supplies to pharma companies for their API business. The Rs.570 crore IPO consists of Rs.200 crore fresh issue and Rs.370 crore OFS. The IPO has 50% allocation for QIBs, 35% for retail and 15% for HNIs. Retail investors can apply in minimum lots of 24 shares. The IPO price band is Rs.603-610.

Ami Organics has completed pre-IPO placement of Rs.100 crore with marquee institutions. Ami Organics saw sharp improvement in net margins and RONW between FY19 and FY21. As 70% of the IPO will be used to reduce debt, this should help ROCE in future. Its top pharma intermediate products have 70-75% market share in their respective segments. The IPO is priced at 41 times P/E, better than peer group.