Data Patterns (India) shares began trading on the stock exchanges at a premium on Friday morning amid volatile market momentum. Data Patterns stock price was trading at Rs 864 per share on opening, up 47.69% or Rs 279 apiece from the upper end of the price of Rs 585 per share. Minutes into the first trading session, the stock was down 5% from the listing price at Rs 817 per share. The Rs 588 crore IPO (Initial public offering) of the company was heavily oversubscribed earlier this month. The public issue was subscribed a total of 119.62 times. Data Patterns is a vertically integrated defence and aerospace electronics solutions provider catering to the indigenously developed defence products industry.
Data Patterns shares were offered earlier this month in the fixed price band of Rs 555-585 per share, in a bid lot of 25 equity shares. The public issue of the company was oversubscribed led by Non-institutional Investors who subscribed their portion of the IPO 254 times. Qualified Institutional Buyers had bid 191 times while the retail portion was subscribed 23 times. The issue was a mix of a fresh issue and an offer for sale (OFS) by existing shareholders of the company. The funds raised will be utilized for Capex expenditure, debt repayment and funding of working capital requirements. On listing the company had a market capitalization of Rs 4,483 crore.
Analysts are not ruling out further gains for Data Patterns stock. “We believe Data pattern has potential to generate 15-20% returns from this price as well in next few quarters and expect the stock to cross Rs 1,100 levels in next few quarters,” said analysts at CapitalVia Global Research. “Investors having the intent to hold the stock for a long term should try to accumulate stock in any healthy dip around Rs 725-755,” they added.
According to brokerage firm Motilal Oswal, Data Patterns revenue/EBITDA/PAT has grown at a 31%/90%/169% CAGR over FY19-21, while its EBITDA margins expanded from 19.5% in FY19 to 41.1% in FY21. “The growth was supported by robust order book which grew at 40% CAGR over FY18-1HFY22 and provides strong revenue visibility. It generates strong cash flows and will become debt-free post IPO. Its return ratios are healthy at ~13%,” they added. Motilal Oswal had a ‘Subscribe’ rating the IPO, valuing the company the firm 55x FY21 P/E (on a post issue basis).