The maiden issue public issue of MTAR Technologies, a leading national player in the precision engineering industry is all set to open for subscription from 3rd March 2021 and will be available for subscription till the 5th of March 2021.
Incorporated as a company in 1999, MTAR Technologies which started its operations in the year 1970 as a partnership firm caters to projects of high national importance such as nuclear power program for civil use, India’s space program, defence projects, etc.
MTAR Technologies intends to utilize the share sale proceeds towards working capital requirements, repayments of borrowings, and general corporate purposes.
Some quick facts about the MTAR Technologies IPO:
The price band for the IPO is set at Rs. 574-575 per share.
The minimum lot size is 26 shares. An individual retail investor can bid for a maximum of 338 shares or 13 lots.
The issue size for MTAR Technologies is Rs. 600 crores.
Shares of MTAR Technologies are expected to be listed around 16th March 2021.
Key strengths and opportunities
- MTAR Technologies ranks as one of the top players in the precision engineering industry in India.
- Company has built strong long-standing relationships with its clients like ISRO, NPCIL, Indira Gandhi Centre for Atomic Research, DRDO etc. for several decades.
- The company has state-of-the-art manufacturing facilities spread across 7 locations.
- Wide product portfolio catering to diverse clients from nuclear, space, defence and clean energy.
- Strong and diversified supplier base for sourcing raw materials.
- Consistent growth in financial performance
- Experienced management team
- MTAR Technologies operates in an industry with high entry barriers
Key challenges to consider while investing in MTAR Technologies:
In its Red Herring Prospectus, the company has listed some factors which may impact the future performance of the company, such as:
- A significant portion of the company’s revenue is generated from a limited number of customers. A significant reduction in demand from such significant customers in the future may adversely affect the company’s business and cash flows.
- Any cut in the budget allocated to the company’s major clients like NPCIL, ISRO, and DRDO by the Government of India could adversely affect the company’s ability to grow or maintain its sales and revenues.
- The entry of private or foreign companies due to liberalization of the defence/space sectors may erode the company’s competitive edge or increase competition.
- In the absence of long-term supply agreements with customers, any change in demand from existing clients may adversely affect the company\’s business.
- Any failure to comply with high-quality standards may lead to the cancellation of existing and future orders which may adversely affect the company\’s reputation as well as cash flows.
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