The Rs 600-crore MTAR Technologies initial public offering (IPO) opened for subscription today. Price band for the IPO has been fixed at Rs 574-575 per share. The Hyderabad-based firm raised Rs 180 crore from 15 anchor investors on Tuesday. It allocated 31.11 lakh shares at Rs 575 per share to anchor investors.
The IPO comprises a fresh issue of 21,48,149 equity shares and an offer for sale of 82,24,270 equity shares by promoters and investors. Applications in the IPO can be made in a minimum lot size of 26 shares for which Rs 14,950 would have to be spent. An investor can buy a maximum 13 lots of 338 shares amounting to Rs 1,94,350. JM Financial and IIFL Securities have been appointed as the book-running lead managers to the issue. Equity shares of MTAR Technologies will be listed on BSE and NSE.
The ongoing IPO is the ninth public offer in the current calendar 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.
The IPO will close on March 5.
Here's a look at what brokerages and experts said about the prospects of the IPO.
LKP Securities has given a subscribe rating to the IPO.
"At the higher end of price band of Rs 575, the stock is valued at 20x FY20 earnings of Rs 28.3 and commands premium considering its healthy order book, visibility of topline growth, competitive edge, superior profitability as compared to peers, return ratios, wide clientele spread across the globe, sound R&D base and technological progress. We recommend investors to SUBSCRIBE to the IPO."
Jyoti Roy - DVP- Equity Strategist at Angel Broking said, "At the higher end of price band, the company is offering the shares at P/E multiple of 49.1xFY20 EPS. We believe that the company is uniquely positioned to benefit from the government's focus on the defence sector and make in India initiative. We are positive on the long-term prospects of the Company and recommend "SUBSCRIBE" to the MTAR Technologies IPO for long term as well as for listing gains."
Geojit too has given a subscribe rating to the IPO.
"At the upper price band of Rs 575, MTAR is available at a P/E of 47.3x (annualized basis on FY21E EPS of Rs.12.2) which is aggressively priced. With no listed peers and a positive sentiment in the space and defence sectors due to Make in India and Atmanirbhar Bharat with limited competition for the products they manufacture, we assign a Subscribe rating, with a long term perspective," the brokerage said in a note.