Paras Defence IPO Opens For Bidding Today. Should You Invest?

Paras Defence and Space Technologies' IPO, consisting of a fresh issue amounting to Rs 140.60 crore and an offer for sale of up to 1.72 million shares, will remain open until September 16

Paras Defence IPO Opens For Bidding Today. Should You Invest?

Paras Defence's shares are likely to list on the bourses on October 1

Highlights

  • Paras Defences Rs 170.7 crore IPO is open from September 21 to 23
  • The IPO is fresh issue of Rs 140.60 crore and OFS of 1.72 million shares
  • Paras Defence is in defence optics and electronics, and heavy engineering

Paras Defence and Space Technologies' Rs 170.7 crore initial public offering (IPO) is open for bidding for three days from September 21 to September 23. Paras Defence IPO consists of a fresh issue of Rs 140.60 crore and an offer for sale (OFS) of up to 1.72 million shares by existing shareholders.

A total of 50 per cent of the issue size has been reserved for qualified institutional buyers, 35 per cent for retail investors and remaining 15 per cent for non-institutional investors. Investors can bid for a minimum of 85 shares and in multiples thereof, extending up to 13 lots.

The company will utilise the IPO proceeds to purchase machinery and equipment, fund incremental working capital requirements and for general corporate purposes.

Paras Defence is involved in defence and space optics, defence electronics, heavy engineering, electromagnetic pulse protection solutions and niche technologies. Its major clients are Bharat Electronics, Bharat Dynamics and Hindustan Aeronautics, and companies based in Belgium, Israel and South Korea.

Should you invest in the IPO of Paras Defence?

"Paras Defence is looking to expand its production capacity, and gain further market share in India, as well as expand abroad. At the higher end of the price band, Paras Defence is aggressively priced at a P/E ratio of 43 times FY21 EPS (on a post-issue basis)," Indwealth said in a note to its investors.

"Given factors such as robust outlook, higher budgetary allocation in the future, stable operational performance, strong order book, steady margins and return ratios, we remain positive on the prospects of this issue," Indwealth added.

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