MTAR Technologies IPO: Trading at 75% premium in gray market, should you invest?

MTAR Technologies IPO: The Hyderabad-based tech company is set to raise Rs 596 crore through an IPO. The company’s IPO will open on March 3 and will close on March 5. Amid the ups and downs in the stock market, the IPO of MTAR Technologies is trading at a 75 per cent premium in the gray market. The company’s price band is Rs 574-575. While its unlisted shares in the gray market are trading at Rs 1005 above Rs 430 above the issue price.

Analysts believe that the government’s focus is on campaigns like Make in India and Self-reliant India, which will benefit companies like MTAR Technologies. According to Financial Express, Likita Chipa, senior research analyst at CapitalWaya Global Research, has advised to invest in the issue of MTAR Technologies. They hope that its listing will be at a good premium.

Advising investment in MTAR Technologies, Chipa also stated that the tech company is an important partner of Indian Space Research Organization (ISRO), Defense Research and Development Organization, Nuclear Power Corporation of India Limited (NPCIL) and Bloom Energy of the US. Along with this, there are many Indian companies like Bharat Dynamics and Hindustan Aeronautics in the company’s client list.

MTAR Technologies also works with Israel’s Rafael Advanced Defense System and Elbit Systems. The company has been serving in the fields of defense, aerospace and energy sector for the last 40 years.

Aastha Jain of Hem Securities is advised to subscribe to this IPO. Aastha Jain says that in this IPO, it is advisable to invest money from both listing gain and long-term perspective. Aastha says that the company client list is very strong. It caters to both domestic and foreign customers. Its order book is also very strong. The debt on the company is also very low. The company caters to the defense sector. There is a lot of potential in this sector, which will benefit the company.

How were the results of the December quarter

The company had an order book of Rs 336.2 crore for the quarter ended 31 December 2020. In the last three years, the company’s revenue growth has grown at a rate of 17 per cent CAGR and profit after tax at 140 per cent CAGR. The company’s portfolio is diversified and does not depend on any one sector.

The company will have a fresh issue of 123.52 crore in its issue and will sell shares worth Rs 472.90 crore through Offer for Sale (OFS). This stock will be listed on both BSE and NSE. 10,372,419 shares of Rs 10 will be issued under the IPO with a total value of Rs 596.41 crore. MTAR Technologies currently has 7 manufacturing units in the country.

TAR Tech recently raised Rs 100 crore from SBI Mutual Funds and Axis Mutual Funds at a price of Rs 540 per share through pre-IPO placements. This has led to the company’s valuation of Rs 1660 crore.

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