Mumbai: Shares of MTAR Technologies made a stellar debut on Monday. The stock listed at ₹1050, a 82.6% premium over its issue price of ₹575 a piece. The initial public offer of the company was subscribed 200.79 times with a price band of ₹574-575 per share.
The IPO for ₹596 crore was open for subscription from 3-5 March. Proceeds of the issue will be issued for repayment or prepayment in full or part of borrowings availed by the company, funding working capital requirements and general corporate purposes.
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Ahead of the issue, most analysts were positive on the company’s prospects. “The company is available at a price to earnings (PE) of 56.5 times (post issue basis) on FY20 PAT. Taking cognisance of the huge growth opportunities for MTAR and a high margin business that would aid flow of profitability to the bottomline," said ICICI Securities in a note on 2 March.
MTAR’s total order book was at ₹336 crore as on December. Part of the total, ₹80 crore, comes from Clean Energy segment (Bloom Energy). Currently, the company makes hot boxes for Bloom Energy. MTAR is in the process of development and manufacture of hydrogen boxes and electrolysers to serve Bloom.
Going ahead, the fuel cell market is expected to grow at a CAGR of 14-15%. “This coupled with Bloom’s tie up with Gail to deploy fuel cell technology is expected to augur well for the company," said ICICI Securities.
“At upper end of the price band, this issue is trading at a PE of 56.5 times and an enterprise value/EBITDA of 30.6 times as on FY20 earnings," said analysts at Prabhudas Lilladher.
Currently, the company has seven manufacturing units in Hyderabad with more than 400 machines, 891 permanent employees and 248 contractual workmen. MTAR Technologies operates in three segments including nuclear, space & defence and clean energy and manufactures 14 products in the nuclear sector, six in space & defence and three in the clean energy sector.
MTAR Technologies, a precision engineering solutions company, was founded in 1970. The company manufactures hi-precision indigenous components, subsystems and assemblies having components with close tolerances (5-10 micros).
