
The ₹597cr ($81.4m) IPO of MTAR Technologies opened recently.
As at the day’s close on March 3rd, the Hyderabad-based firm’s issue was 3.01x subscribed at a price band of ₹574-575 ($7.43) per share. At the upper-end of the band, the company seeks a market cap of ₹1,768cr ($241.14m).
The IPO closes on March 5th, allotment expected on March 10th, and listing by March 16th.
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A precision engineering solutions company, MTAR Technologies manufactures mission critical precision components with close tolerances (5-10 microns), for a variety of sectors including clean energy, semiconductors, nuclear, space, optics and defence.
FYI: “Precision engineering” is the engineering sub-discipline that deals with the design of machines with a level of accuracy that is many orders of magnitude smaller than the size of the machine or instrument itself.
MTAR began operations in 1970 and currently operates out of seven manufacturing facilities, including an export-oriented unit. Its clients include the likes of ISRO, NPCIL, DRDO, California-based Bloom Energy, Indira Gandhi Centre for Atomic Research, Bharat Dynamics, Hindustan Aeronautics, and Israel-based Rafael and Elbit.
Its major product portfolio includes three kinds of products in the clean energy sector, 14 kinds of products in the nuclear sector and six kinds of products in the space and defence sectors. As of the end of CY20, the manufacturing company’s order book stood at ₹336cr ($45.8m) (1.6x its FY20 revenue) of which the space and defence segment accounted for 48% share, followed by the nuclear sector (28%) and clean energy (24%).
Coming to MTAR’s IPO (link to RHP), here’s what you need to know:
MTAR boasts decent financials and healthy potential with the Government’s focus on boosting the manufacturing sector vis-a-vis Make in India and Atma Nirbhar Bharat.
Our broad take is that though MTAR appears like an attractive BUY considering its stable financials and strong growth potential, its lack of customer diversification needs to be kept into account while deciding the size of one’s exposure to it.
PS: Click to read our pieces of some previous high-profile IPOs: RailTel Corp., IRFC, Burger King India, Brookfield REIT, Gland Pharma, Ant Financial (and why it was abruptly suspended), Happiest Minds Technologies, CAMS and UTI AMC.
PPS: Better yet - how about a Quiz on IPOs?!
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