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MTAR Technologies IPO 2021 : Key Information And IPO Highlights

MTAR Technologies is the best domestic company in the field of precision engineering. It has expertise in making essential components for different national purposes with its machinery, assembly line, testing facilities and fabrication. MTAR Technologies also has an in house quality control department for measuring the quality of its products. It has a very diversified portfolio and has worked in many major national missions as well. The company has worked for GSLV mark 3, Agni Programs, etc. Some of its essential clients list include ISRO, Rafael, DRDO, Elbit etc. It meets the requirements of Indian nuclear, space and defense sectors. MTAR Technologies has also worked into many high privileged national missions as well. It currently functions in India with 7 state of art highly equipped and technologically advanced manufacturing facilities in Hyderabad.

Key Highlights About the IPO

The MTAR Technologies IPO is set to hit the Dalal Street on 16th March, 2021. The IPO is getting open for subscription on 3rd March, 2021. The Subscription ends on 5th March, 2021. The issue is a book built issue and the Face Value per share is 10 Rs. The IPO price band is set at 574 to 575 Rs per share. The minimum size of shares for subscription is set at 26. Hence the minimum order quantity would be 26 shares.

Also the maximum shares that one can opt for are 338 shares amounting to Rs. 194350 Rs. The issue is set to raise Rs. 596.41 Crore Rs. This includes 10372419 Shares. The Issue includes both Fresh shares and Offer for sale. The fresh Issue is amounted to Rs. 123.52 Crore Rs and the equivalent number of shares are 2148419. The offer for sale includes 8224270 shares worth 472.90 Crore Rs. The IPO will be listed at both NSE and BSE. The registrar for the company is Karvy Fintech Private Limited.

Tabular Data

IPO OPENING DATE	3rd March, 2021
IPO CLOSING DATE	5th March, 2021
ISSUE TYPE	Book Built Issue
Face Value per share	Rs. 10 per share
IPO price band	574 – 575 Rs per share
LOT SIZE	26 shares
MINIMUM ORDER QUANTITY	26 shares
ISSUE SIZE	596.41 crore Rs. (10372419 Equity shares)
FRESH ISSUE	123.52 crore Rs. (2148419 Equity shares)
OFFER FOR SALE	472.90 crore Rs. (8224270 Equity shares)
LISTING AT	NSE, BSE
LISTING DATE	16th March, 2021

Important Dates

IPO OPENING DATE	3rd March, 2021
IPO CLOSING DATE	5th March, 2021
IPO ALLOTMENT DATE	10th March, 2021
REFUNDS	12th March, 2021
DEMAT A/C CREDITED ON	15th March, 2021
IPO LISTING DATE	16th March, 2021

MTAR Technologies IPO will be launched on 3rd March, 2021. The subscription would conclude on 5th March, 2021. The allotment would be processed by 10th March, 2021. The DEMAT A/C of shareholders would get credited on 15th March, 2021 with shares. The Refunds would be initiated on 12th March, 2021. The share would hit the Dalal street on 16th March, 2021.

Promoter Holding

The promoters holding of the company is 62.24% pre IPO issue. The major promoters of the company are Parvat Srinivas Reddy, P. Leelavathi, G. Kavitha Reddy, Anushman Reddy, Kalpana Reddy, Sranya Reddy, Manonga and Madhavi. The promoter holding for the company will decrease to 50.25% post IPO issue.

The lead managers for the company are :

IIFL Holdings Limited
JM Financial Consultants Private Limited

Objectives for IPO

The objectives of the public issue are as follows :

The company is having a good amount of borrowing on its balance sheet. The company wants to pay off the borrowings and get less interest applied on it. Hence the company’s primary objective is paying off these borrowings.
The company is also facing working capital requirement shortages due to COVID crisis and revenue shortfalls. Also the net profit has declined hence to run the company in full capacity and focus on expansion the company is in need for more working capital.
MTAR Technologies may also use the money for general corporate purposes.

Company Financials

PARTICULARS (in million Rs.)	2019-20	2018-19	2017-18
ASSETS	3462	3050	2810
REVENUE	2181	1859	1605
NET PROFIT	313	392	54.5

The company has a very well diversified balance sheet and it shows continuous growth. The company had Assets worth Rs. 2810 Million Rs. in 2017-18 which showed growth in coming years. The growth is stable and in an increasing manner. The next year the assets went to increase by 200 million RS. and in the subsequent year the assets increased by another 400 Million Rs. This shows that the company is expanding completely in a decent proportion. In the Dec ending quarter in 2020 the assets of the company were worth Rs. 3819 Million. This means another jump of minimum 600 Million Rs can be aimed in this financial year. Hence the company is good at expanding and allocation of income into business.

Revenue and Net Profits

Also the revenue of the company is consistent and improving. The company reported for revenue of 1600 Million Rs in 2017-18 and it increased by 250 Million Rs. in 2019-20. Hence the assets proved fruitful and the increase in assets inclined the increase in revenue. The revenue increased by another 300 Million Rs. in 2019-20. Although assets increased by 400 Million Rs here the revenue did not show the same amount of growth. However with this pace the company looks good for future perspectives.

The net profits of the company declined significantly in 2020 F.Y. The profits were increasing in significant manner but in 2020 they declined by almost 70 Million Rs. which cannot be ignored. The net profits for the quarter ending on Dec 2020 were 280.69 Million Rs. and it seems that the company would get back to the level of the profits in 2019-2020 year.

Pros

In house expertise for manufacturing.
The company has more than 22 years of experience in this field.
Has a diversified product portfolio
The company has 7 state of art manufacturing facilities in Hyderabad.
It has its own assembly line as well as quality department and R&D department for continuous expansion and speedy completion of work.
Good asset base.
The company has great relations with some of the best companies in the world and multiple government agencies.
MTAR Technologies has a good reputation because it has served in many national missions and defense missions as well.

Cons

Increase in Assets but decrease in revenue. In F.Y. 2020 the company has suddenly decreased in revenue and net profits. The company suffered from COVID heavily.
It seems that one should wait for the quarter ending results so that the company’s current situation can be known about. Also it seems that the company is having problems with inadequate revenue generation in comparison to the assets owned from the last 2 years.