Paras Defence and Space Technologies Rs 170.77-crore IPO will open for subscription on 21 September, at a price band of Rs 165-175 per share of face of Rs 10 each. The issue will close for subscription on 23 September. The public offer consists of a fresh issue of equity shares worth Rs 140.6 crore and an offer-for-sale (OFS) of up to 17.24 lakh equity shares worth Rs 30.17 crore, at the upper end, by promoters of the company. The OFS consists of up to 12.5 lakh by Sharad Virji Shah, up to 50,000 shares by Munjal Sharad Shah, up to 3 lakh shares by Ami Munjal Shah, and up to 62,245 shares each by Shilpa Amit Mahajan and Amit Navin Mahajan.
In the primary market, Paras Defence and Space Technologies were quoting at a premium of Rs 105 over the IPO price. On Thursday, shares were trading at Rs 280, a premium of 60 per cent in the grey market, according to the people who deal in unlisted shares of the company. Investors can bid for a minimum of 85 equity shares and in multiples thereafter, implying a minimum investment amount of Rs 14,875 per lot.
Up to 50 per cent of the total offer is reserved for qualified institutional buyers, and 15 per cent for non-institutional investors, and the remaining 35 per cent for retail investors. The company does not have any listed industry peers in India. The net proceeds from the fresh issue are proposed to be utilised for purchase of machinery and equipment; funding incremental working capital requirements; repayment or prepayment of all or a portion of certain borrowings/outstanding loan facilities availed by the company; and general corporate purposes.
The weighted average return on net worth for last three fiscals is 11.94 per cent. The Price/earnings ratio based on diluted EPS for FY21 for the company at the upper end of the price band is as high as 31.53.
Paras Defence and Space Technologies’ R&D facilities at Nerul, Navi Mumbai are recognised by and registered with DSIR. It’s subsidiary, Paras Aerospace, is also in the process of relocating its operation and R&D centre to Nerul, Navi Mumbai. There are several companies that manufacture certain of the products that Paras Defence sells in various geographical markets including Data Patterns, Mistral Solutions, CoreEL Technologies, Ophir Optronicx Solutions, etc. The company has appointed Anand Rathi Advisors to manage the issue. Link Intime India has been appointed as the registrar of the issue.