MTAR Technologies initial public offering (IPO) was over-subscribed within hours of opening on the stock exchanges, data from the National Stock Exchange showed. MTAR Technologies shares were in huge demand among investors as it received total bids for 91 lakh shares as against 72.60 lakh shares on the offer. Nearly 70 lakh bids were received for the MTAR Technologies IPO at the cut-off price of Rs 575. MTAR Technologies IPO was subscribed 1.25 times as of 12:30 pm, NSE data showed. (Also Read: MTAR Technologies IPO Opens, Should You Invest?)
Retail investors were seen bidding in huge quantities for the MTAR Technologies shares in the IPO as the portion reserved for retail investors was subscribed 1.75 times, while portion for qualified institutional buyers was yet to be subscribed.
Ahead of the MTAR Technologies IPO the company had raised Rs 179 crore from 15 anchor investors which included marquee foreign investors like Nomura Funds, Ireland Public Limited Company, Jupiter South Asia Investment Company, White Oak Capital and Goldman Sachs.
Domestic institutional investors who were allocated shares are SBI Mutual Fund (MF), Axis MF, ICICI Prudential MF, HDFC MF, Birla Sunlife MF, Kotak Mahindra MF, Nippon India MF, Franklin Templeton MF, Sundaram MF, Invesco MF and Birla Sun Life Insurance.
SBI MF and Axis MF had also invested Rs 70 crore and Rs 30 crore respectively in a pre-IPO round concluded last month.
Brokerage firm Anand Rathi has 'subscribe' rating for MTAR Technologies IPO. In a research report Anand Rathi said, "At the upper end of the IPO price band, it is offered at 45.32 times its trailing twelve months earnings, with a market cap of Rs 1,769 crore. The company operates in an industry with high entry barrier especially given the steep learning curve, investment in advanced manufacturing facilities, precision requirements and past track record."
Considering the company's expertise in providing wide range of precision engineering products with complex manufacturing capability, high entry barrier, strong balance sheet and management; we give this IPO a "Subscribe" rating.
The Hyderabad-based MTAR Technologies manufactures equipment for the defence, aerospace and nuclear energy sectors. The company is primarily engaged in the manufacturing of mission-critical precision components with close tolerance and in critical assemblies through its precision machining, assembly, specialized fabrication, testing, and quality control processes. ISRO, HAL, Defence Research and Development Organisation (DRDO), Bharat Dynamics and Bhabha Atomic Research Centre are some of its clients.
MTAR Technologies is selling shares in the price band of Rs 574-575 per share in the IPO and company plans to raise Rs 596 crore.
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