11 Mar , 2021 By : kanchan Joshi
The share allocation in MTAR Technologies IPO, which was subscribed over 200 times, has been finalised. According to market observers, the grey market premium on MTAR Tech shares indicate that the stock is poised to make a strong debut on exchanges. Investors can check allotment status on its KFin Tech website once it is finalised.
After the huge-subscription, the grey market premium has gone up to Rs540-545 levels, suggesting it is doubler candidate on listing, says grey-market tracker Abhay Doshi, who is the founder of UnlistedArena.com, which deals in pre-IPO and unlisted shares.
The price band for share sale was fixed at Rs574- 575 per equity share and the issue got fully subscribed within first few hours on the first day of the issue itself. The IPO was open between March 3 and March 5.
Ahead of the IPO, MTAR Technologies, a precision engineering solutions company, had raised Rs179 crore from anchor investors.
Despite the issue being aggressively priced, many brokerages recommended "subscribe", citing limited competition for the products they manufacture.
"MTAR is a leading precision engineering solutions company with presence in the nuclear, defence and space and clean energy sectors. Backed by growing demand and rising investment in these sectors, the demand for precision engineering products is expected to rise steadily in the upcoming years. Also government’s efforts to boost manufacturing sector and make in India campaign will drive growth," says Nirali Shah, Head of Equity Research, Samco Securities, which recommended a subscribe to the issue.
"MTAR’s revenue and profits have grown at a CAGR of 15.7% and 140.3% respectively over FY18 to FY20. Overall the company has a good financial track record with a debt to equity ratio of 0.13 only. On the risks front, the company derives over 80% of its revenue from its top 3 customers and 49% of revenue from Bloom Energy leading to concentration risk. Besides it does not have any long term contracts with its clients. Over all MTAR is overpriced at a FY20 P/E of 57.5 times. But it has been commanding a good grey market premium," she added.
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