Data Patterns (India) IPO: Check grey market premium, analysts view before subscribing
The company on Monday raised Rs 176 crore from anchor investors. Here are the key things you should know before subscribing to the IPO.
- Dec 14, 2021,
- Updated Dec 14, 2021 11:18 AM IST
The Rs 588-crore initial public offering (IPO) of Data Patterns (India) hit the primary market on Tuesday. The company has fixed a price band of Rs 555-585 per share for the initial share sale. The issue will close on December 16. The company on Monday raised Rs 176 crore from anchor investors. Here are the key things you should know before subscribing to the IPO.
About the company: Data Patterns (India) was incorporated on November 11, 1998. It is among the few vertically integrated defence and aerospace electronics solutions provider catering to the indigenously developed defence products industry. Their offerings cater to the entire spectrum of defence and aerospace platforms-space, air, land and sea. The company’s manufacturing facility consists of a 1,00,000 square feet factory built on 5.75 acres of land in Chennai, which has facilities for design, manufacturing, qualification, and life cycle support of high-reliability electronic systems used in defence and aerospace applications. The company is also planning to acquire an additional 2.81 acres of adjacent land for further expansion.
Issue details: The offer comprises a fresh issue of equity shares aggregating up to Rs 240 crore and an offer for sale of equity shares aggregating up to Rs 348.22 crore.
Objective of the issue: The motto of the issue is to prepay or repay all or a portion of certain outstanding borrowings availed by the company, fund working capital requirements of the company, upgrade and expand the company’s existing facilities at Chennai and meet general corporate purposes.
Grey market premium: Shares of Data Pattern were trading at a premium of Rs 580 in the unlisted market in the morning trade, according to IPO Watch. This means that the grey market is projecting that shares of the company to list at Rs 1,165.
Analysts’ take: Asit C Mehta has given a ‘Subscribe’ rating to the issue for listing gains. “Data Patterns has a proven track record of operational excellence as well as an order book that gives good visibility for the near term,” the brokerage said.
As of September 30, 2021, the order book of the company stood at Rs 581.3 crore.
YES Securities also has a ‘Subscribe’ rating on Data Patterns (India). “We see reasonable listing gains given it being an indigenous, integrated and strategic electronic solutions provider, innovation-focused business models, experienced management team with a skilled workforce and modern certified manufacturing facility enabling it to consistently offer quality and complex components allowing to build a robust relationship with its customers,” YES Securities said in a report.
On the other hand, Marwadi Shares and Finance has given ‘Subscribe’ with caution rating to the ongoing public offer. “We assign a “Subscribe” (With caution) rating to this IPO as the company is one of the fastest-growing companies in the defence and aerospace electronics sector. However, significant working capital requirements, client concentration, and promoter pledging keep us cautious from a long-term perspective,” the brokerage said.
The Rs 588-crore initial public offering (IPO) of Data Patterns (India) hit the primary market on Tuesday. The company has fixed a price band of Rs 555-585 per share for the initial share sale. The issue will close on December 16. The company on Monday raised Rs 176 crore from anchor investors. Here are the key things you should know before subscribing to the IPO.
About the company: Data Patterns (India) was incorporated on November 11, 1998. It is among the few vertically integrated defence and aerospace electronics solutions provider catering to the indigenously developed defence products industry. Their offerings cater to the entire spectrum of defence and aerospace platforms-space, air, land and sea. The company’s manufacturing facility consists of a 1,00,000 square feet factory built on 5.75 acres of land in Chennai, which has facilities for design, manufacturing, qualification, and life cycle support of high-reliability electronic systems used in defence and aerospace applications. The company is also planning to acquire an additional 2.81 acres of adjacent land for further expansion.
Issue details: The offer comprises a fresh issue of equity shares aggregating up to Rs 240 crore and an offer for sale of equity shares aggregating up to Rs 348.22 crore.
Objective of the issue: The motto of the issue is to prepay or repay all or a portion of certain outstanding borrowings availed by the company, fund working capital requirements of the company, upgrade and expand the company’s existing facilities at Chennai and meet general corporate purposes.
Grey market premium: Shares of Data Pattern were trading at a premium of Rs 580 in the unlisted market in the morning trade, according to IPO Watch. This means that the grey market is projecting that shares of the company to list at Rs 1,165.
Analysts’ take: Asit C Mehta has given a ‘Subscribe’ rating to the issue for listing gains. “Data Patterns has a proven track record of operational excellence as well as an order book that gives good visibility for the near term,” the brokerage said.
As of September 30, 2021, the order book of the company stood at Rs 581.3 crore.
YES Securities also has a ‘Subscribe’ rating on Data Patterns (India). “We see reasonable listing gains given it being an indigenous, integrated and strategic electronic solutions provider, innovation-focused business models, experienced management team with a skilled workforce and modern certified manufacturing facility enabling it to consistently offer quality and complex components allowing to build a robust relationship with its customers,” YES Securities said in a report.
On the other hand, Marwadi Shares and Finance has given ‘Subscribe’ with caution rating to the ongoing public offer. “We assign a “Subscribe” (With caution) rating to this IPO as the company is one of the fastest-growing companies in the defence and aerospace electronics sector. However, significant working capital requirements, client concentration, and promoter pledging keep us cautious from a long-term perspective,” the brokerage said.