The IPO of MTAR Technology is getting great response from investors. The IPO has subscribed nearly 87 times till 2 pm on March 5, the last day of the issue. Reserve Porson has received bids for retail investors nearly 24 times so far. At the same time, premium of MTAR technology is also increasing in the gray market. In the gray market, it is shown to trade at an 80 percent premium to the issue price. The company launched its IPO on 3 March. Given the company’s superior business model, most experts are positive about it.
How many bids for which position
The IPO of MTAR Technology has so far received 87 times bids. The reserve position for retail investors has been filled 24 times so far, while for non-institutional investors, Reserve Porson has received 290 times bids so far. Reserve Porson has received 46 times bids for qualified institute boys.
Increased premium in gray market
MTAR Technology shares are trading in the gray market with an increase of 490 rupees from the issue price. That is, at about 85 percent premium compared to the issue price. The price band of the IPO has been kept at Rs 574-575 and the face value is Rs 10 per equity share. The IPO’s lot size is 26 shares, that is, it is necessary to invest at least Rs 14950. Under the IPO, there will be a fresh issue of Rs 123.52 crore and an offer for sale of Rs 472.90 crore.
What does the company do
MTAR Technology has been serving in the field of Defense, Aerospace and Energy sector since last 4 decades. The client list includes names like ISRO, NPCIL, DRDO, Bloom Energy, Rafael. MTAR Tech recently raised Rs 100 crore from SBI Mutual Funds and Axis Mutual Funds at a price of Rs 540 per share through pre IPO placements. With this, the valuation of the company has increased to Rs 1660 crore. The order book of the company is also very strong. The debt on the company is also very low.
What do experts say on investment
Nirali Shah, Equity Research Head, Samco Securities, says MTAR Technology will use the proceeds from the IPO to reduce debt. At the same time, funds will also be used for working capital requirements. MTAR Technology is the leading service provider in the field of Defense, Aerospace and Energy sector. The client list includes names like ISRO, NPCIL, DRDO, Bloom Energy, Rafael. The government has a focus on the manufacturing sector with Make in India. MTAR’s revenue and profits grew by 15.7% and 140.3% CAGR during FY18 to FY20. The company’s financial record is better. Talking about the risk side, 49% of the company’s revenue comes from the major 3 clients. Listing in IPO can cost money for gain.
Brokerage house LKP Research has also advised subscribing to MTAR technology. The brokerage says that the company’s orderbook is strong and profits are better than Pierce companies. The company has shown growth of 16.5 per cent CAGR in the last 3 years. EBITDA margin is 28.5 per cent in FY 2020. Good growth is expected in the future as well. Brokerage house Geojit Financial Services has also suggested subscribing to the IPO.
(Note: We have given information here on the basis of expert and brokerage house report. There are risks in the stock market, so consult the expert at your level before investing.)