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MTAR Technologies IPO Opens: Should You Subscribe?
Amid IPO market frenzy, another IPO by precision engineering firm, MTAR Technologies will open today. Through the issue, the company aims to accumulate a sum of Rs. 596 crore.
Here are all the details you need to know before betting on to making gains:
1. Issue details:
The issue will run until March 5 and includes fresh share issuance of Rs. 123.51 crore and another will be an offer for sale of Rs. 472.90 crore. The price band for the issue has been fixed in the range of Rs 574- 575 per share.
2. Company details:
The company is into manufacturing of critical and differentiated engineered products. And its clientele includes customers in the nuclear, space and defence, and clean energy sectors such as DRDO, NPCIL, ISRO. Apart from it the company also supplies its product line to international firms such as Bloom Energy and an Israeli defence technology company, among others.
3. Issue objectives:
MTAR plans to utilise the money raised for repayment of the borrowings, to fund the working capital requirements and for general purposes.
4. Grey market situation:
In the grey market, where these unlisted shares trade before the IPO is floated, the company commanded a premium of Rs. 420 per share, signifying likely significant gains for the investors in the company."The company's operating margins are expected to rise further. The government's focus on 'Make In India', exports of defence equipment, and rising budgetary allocations along with entry barriers in the business should support the company in the longer-term," said Manan Doshi, co-founder of Unlistedarena.com.
5. Should we subscribe to the issue of MTAR Technologies?
There are a whole of positives surrounding the company as it is the company's operating margins are likely to increase over time. As the government is gearing to export its product line and also due to its stress on 'Make in India' mission.
TAR Further it may benefit from the government's policy to construct 10 units of nuclear reactors as a single project as it will increase opportunities for domestic suppliers, said Geojit Financial Services. "Lastly, an additional manufacturing facility in Hyderabad is expected to become operational in FY22 that'll allow MTAR to undertake sheet metal jobs for Bloom Energy, ISRO and other customers," the brokerage noted.
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