MTAR Technologies shares make strong debut, surge 90%
Shares are MTAR Technologies made a strong debut on exchanges today. On BSE, shares rose to ₹1,095, as compared to issue price of ₹575. The ₹597-crore initial public offering (IPO) of MTAR Technologies, which was open between March 3 and March 5, was subscribed more than 200 times. The price band was fixed at ₹574- 575 per equity share.
The segment reserved for retail investors was subscribed 28.4 times, qualified institutional buyers category was subscribed 165 times and non-institutional category received 650.79 times subscription.
MTAR Technologies is engaged in the manufacture of mission critical precision components with close tolerances (5-10 microns),and in critical assemblies. It has seven manufacturing facilities, including an export-oriented unit located in Hyderabad, Telangana, and has been servicing the defense, aerospace and energy sectors for more than four decades.
Ahead the IPO, MTAR Tech had raised ₹179 crore from anchor investors.
The company works with clients like Indian Space Research Organization, Defence Research and Development Organization, Nuclear Power Corporation of India Ltd and US-based Bloom Energy Corp, besides catering to other well-known establishments like Bharat Dynamics and Hindustan Aeronautics.
JM Financial and IIFL Securities were the book running lead managers to the issue.
Despite the issue being aggressively priced, many brokerages had recommended subscribe to the issue. "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 & 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," domestic brokerage Geojit said in a note.
Gloss