Mamata Machinery IPO: Price Band, Financials, Key Dates, GMP And More — All You Need To Know

Mamata Machinery Ltd.'s Rs 179.4-crore initial public offering, which is scheduled to open on Thursday, will be a pure offer for sale.

The price band for the IPO has been set in the range of Rs 230 to Rs 243 per share. The market value at the upper end of the price band is Rs 598 crore.

Promoters Mahendra, Nayana and Bhagvati Patel will sell a total of 37.3 lakh shares, while Mamata Group Corporate Services LLP and Mamata Management Services LLP will offer up to 36.5 lakh shares.

At the time of filing of the red herring prospectus, the promoters and promoter group held a 92.45% stake in the Ahmedabad-based machine manufacturer. Since the IPO is entirely an OFS, proceeds from the offer will go directly to the selling shareholders.

The company raised Rs 53.6 crore from anchor investors a day ahead of the launch of its IPO. It allotted 22.04 lakh shares at Rs 243 apiece to seven anchor investors.

• Issue opens: Dec. 19.

• Issue closes: Dec. 23.

• Issue price: Rs 230–243.

• Offer for sale: 73.8 lakh shares.

• Fresh issue: Nil.

• Total issue size: Rs 179.4 crore at the upper end of price band.

• Lot size: Minimum 61 shares, and then in multiples of 61 thereof.

Mamata Machinery started commercial operation as a manufacturer of bag-making machines in 1989. It sells packaging machinery to direct consumer brands catering to the fast-moving consumer goods, food and beverage industry, and bag and pouch making machines to converters and service providers who, in turn, mainly cater to the FMCG and consumer industry.

Balaji Wafers Pvt., Chitale Foods, Gits Food Products Pvt. and Hershey India Pvt. are some of its customers. The company sells its machines under the brand name Vega and Win.

While Mamata Machinery has seen a steady revenue growth over the past few years, the company's margin expansion has not seen a proportionate improvement. The company's bottom line has seen a compounded annual growth rate of nearly 28% over fiscals 2022–24.

In the first quarter of the current fiscal, it reported an operating loss of Rs 30 lakh despite having an inventory writeback of Rs 21 crore. As of June 30, the company has a cash balance of Rs 7.6 crore, including bank balances.

• Expanding existing machineries business from niche markets to large addressable markets.

• Continued diversification of customer base and increasing penetration in new geographies.

• Expanding array of existing products and solutions.

• Reduce operating costs and improve operational efficiencies.

• Fluctuations in prices or supply of raw materials can affect operations and cash flows.

• Heavily dependent on the performance of the FMCG, food and beverage, and consumer industry.

• High inventory levels. As of the June quarter, the company was sitting on 880 days of inventory. Inventory level days were 255, 282 and 291 for fiscals 2024, 2023 and 2022 respectively.

• The company faces significant competitive pressures in its industry.

The grey market premium of Mamata Machinery IPO was Rs 150 as of 4:31 p.m. on Dec. 18, according to InvestorGain. This implies that the shares of the company will likely list at Rs 393 apiece, indicating a 62% premium to the upper end of the price band.

The GMP is not an official price quote for the stock and is based on speculation.

Disclaimer: Investments in initial public offerings are subject to market risks. Please consult with financial advisors and read red herring prospectus thoroughly before placing bids