The shares of Ami Organics surged over 8% on Friday after the company’s promoters, the Chovatia family, divested a 12.5% stake worth $60 million through open market transactions.
Chovatia Family Sells 12.5% Stake for $60 Million
As per data from the National Stock Exchange (NSE), three members of the Chovatia family – Girishkumar Limbabhai Chovatia, Kiranben Girishbhai Chovatia, and Dhwani Girishkumar Limbabhai Chovatia sold 46 lakh (4.6 million) shares amounting to a 12.5% stake in Ami Organics.
The shares were sold at ₹1,030 apiece, totaling the transaction to ₹475.2 crore or around $60 million based on current exchange rates. Prior to this sale, the Chovatia family held a 17.7% stake in the company.
Who Bought the Shares?
The shares were lapped up by several institutional investors and mutual funds such as:
- Morgan Stanley Asia Singapore Pte – 2.19% stake
- Bofa Securities Europe SA – 1.4% stake
- ICICI Prudential Mutual Fund – 1.36% stake
- Malabar India Fund Ltd – 1.32% stake
- Valuequest Investment Advisors – 1% stake
- Goldman Sachs Investments Mauritius Ltd – 0.67% stake
These block deals reflect the confidence that institutional investors have in the future prospects of Ami Organics.
Ami Organics shares surged by over 8% to ₹1,190 on Friday, December 22. This jump came on the back of the following positive development:
New Manufacturing Facility Worth $25 Million
On December 15th, Ami Organics announced the establishment of a new greenfield manufacturing facility in Ankleshwar, Gujarat with an investment of ₹200 crore or around $25 million.
This new plant will allow the company to ramp up production to capitalize on ‘Make in India’ opportunities in the pharma sector. The facility is expected to be operational by Q3 FY2024.
The establishment of this additional capacity, along with the promoter stake sale, renewed investor confidence in the company’s growth plans, leading to a spike in its share price.
Outlook Positive for Ami Organics
With continued investments in expanding production capacities, Ami Organics is well-positioned to cater to growing demand from domestic and global pharma companies.
The promoter stake sale also unlocks value for reinvestment into the core business. The open market transactions saw strong demand from institutional investors and reflect the positive long-term outlook for the company.
Backed by robust fundamentals, a healthy balance sheet, and expansion plans, Ami Organics shares could see further upside as the company delivers on its growth strategy.
The divestment of promoter shares worth $60 million and the announcement of a new $25 million production facility catalyzed an 8% surge in Ami Organics’ share price on Friday. With robust prospects and increased capacity, the company remains an attractive bet in the specialty chemicals and pharma sector.