MTAR Technologies IPO opens next week; check issue size, price band, grey market premium, other details

By: |
February 25, 2021 11:48 AM

MTAR Technologies, a precision engineering solutions company, is set to launch its initial public offering (IPO) for subscription on March 3, 2021.

MTAR Technologies, MTAR Tech IPO, MTAR Tech grey market premiumIn the grey market on Thursday, MTAR Technologies shares were commanding a grey market premium of Rs 245 over the IPO price

MTAR Technologies, a precision engineering solutions company, is set to launch its initial public offering (IPO) for subscription on March 3, 2021. The company has fixed the price band of the issue at Rs 574-575 per share of face value of Rs 10 each. Through this issue, the company looks to raise Rs 596.41 crore, at the upper end of the price band. The issue will close for subscription on March 5, 2021. The issue comprises a fresh issue of 21.48 lakh equity shares by the company and an offer for sale (OFS) of 82.24 lakh equity shares by promoters and investors.

In the grey market on Thursday, MTAR Technologies shares were commanding a grey market premium of Rs 245 over the IPO price, at the upper band. MTAR Technologies shares were trading at Rs 820, implying a grey market premium of 42.60 per cent over the issue price. Promoters like P Leelavathi will be selling 4.5 lakh equity shares through offer for sale, Parvat Srinivas Reddy (3 lakh shares), Kalpana Reddy (1.49 lakh shares), Saranya Loka Reddy (3 lakh shares), C Usha Reddy (2 lakh shares), G Kavitha Reddy (3 lakh shares), D Anitha Reddy (1.25 lakh shares), K Shalini (2.25 lakh shares) and A Manogna (3 lakh shares).

Who can bid for how much?

Investors can bid for a minimum of 26 equity shares and in multiples of 26 shares thereafter, translating to a minimum investment of Rs 14,950 per lot. Up to 50 per cent of the net issue will be reserved for Qualified Institutional Buyers (QIB). The company has reserved not more than 35 per cent of the issue for the retail investors and the remaining 15 per cent for the Non-Institutional category. JM Financial and IIFL Securities are the book running lead managers to the issue, while KFin Technologies Private Ltd is the registrar.

The Hyderabad-based company has precision engineering capabilities to build nuclear and pressurized water reactors, aerospace engines, missile systems, aircraft components and many such other critical components and assemblies. MTAR supplies high-precision machine fabricated systems to DRDO Labs, Bharat Dynamics, HAL, BEL, etc., and other defence R&D. Abhay Doshi, Founder, UnlistedArena.com, dealing in Pre-IPO & Unlisted Shares, told Financial Express Online that on the operational front, the company enjoys 28.5 per cent operating margin and 14 per cent net margins. “However, the sources of revenue are concentrated which is bit concerning,” Doshi said.

MTAR Technologies 9th IPO so far in 2021

In the calendar year 2021, MTAR Technologies would be the ninth public issue after Indian Railway Finance Corporation (IRFC), Indigo Paints, Home First Finance Company India, Stove Kraft, Brookfield India REIT, Nureca, RailTel Corporation of India and Heranba Industries. The recent government initiatives such as Make in India, India aiming to become an exporter in defense sector, rising budgetary allocations for defense and space sectors, provide a great opportunity to such companies. “Given the positives and bullish market sentiments, I believe the IPO should capture much attraction across the investors,” he said.

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