MTAR Technologies share sale via initial public offering (IPO) began today and will continue till March 5, Friday. MTAR Technologies is planning to raise Rs 596 crore from the IPO which comprises of an offer for sale of Rs 472.90 crore and fresh issue of Rs 123.52 crore. MTAR Technologies is selling shares in the price band of Rs 574 to 575 per share in lot size of 26 shares. A retail investor can apply for a maximum of 13 lots at the upper price band of the issue one lot size will cost Rs 14,950.
Brokerage firm Anand Rathi has 'subscribe' rating for MTAR Technologies IPO. In a research report Anand Rathi said, "At the upper end of the IPO price band, it is offered at 45.32 times its trailing twelve months earnings, with a market cap of Rs 1,769 crore. The company operates in an industry with high entry barrier especially given the steep learning curve, investment in advanced manufacturing facilities, precision requirements and past track record."
Considering the company's expertise in providing wide range of precision engineering products with complex manufacturing capability, high entry barrier, strong balance sheet and management; we give this IPO a "Subscribe" rating.
The Hyderabad-based MTAR Technologies manufactures equipment for the defence, aerospace and nuclear energy sectors. The company is primarily engaged in the manufacturing of mission-critical precision components with close tolerance and in critical assemblies through its precision machining, assembly, specialized fabrication, testing, and quality control processes. ISRO, HAL, Defence Research and Development Organisation (DRDO), Bharat Dynamics and Bhabha Atomic Research Centre are some of its clients.
The company will utilise net proceeds from its fresh issue and pre-IPO placement to repay debt and for working capital requirements.
JM Financial and IIFL Securities are the book running lead managers to the public issue.
The MTAR Technologies IPO will be the ninth public offer since the beginning of this year, after Indian Railway Finance Corporation, Indigo Paints, Home First Finance Company, Stove Kraft, Brookfield India REIT, Nureca, RailTel Corporation of India and Heranba Industries.