Shares of MTAR Technologies Ltd. surged on debut after investors piled into the initial public offering of the defence equipment maker.
The stock began trading at Rs 1,063.9 apiece on the National Stock Exchange, a premium of 85% to its issue price of Rs 575 apiece. Shares touched an intra-day high of Rs 1,110 apiece, up 93% in early minutes of trading.
The three-day IPO was subscribed 200.79 times, beating Mrs. Bectors Food Specialities Ltd. to become the most successful issue by any Indian company in more than three years. Salasar Techno Engineering Ltd.'s IPO in July 2017 was subscribed 273 times.
MTAR Technologies, according to its red herring prospectus, plans to use the proceeds from the share sale to repay borrowings and fund working capital requirements. In a pre-IPO placement, the company had sold shares to schemes of SBI Mutual Fund and Axis Mutual Fund.
It manufactures high precision components, sub-systems, assemblies having components with close tolerances (5-10 micron) to serve projects in the clean energy, nuclear sector, space and defence.
MTAR has seven manufacturing units, including an export-oriented facilty that supplies power units to Bloom Energy, and high-end components to an Israeli defence technology company. Its key customer in the nuclear segment, Nuclear Power Corporation of India Ltd., accounts for 27% of the overall revenue.
MTAR has an order book of Rs 334 crore across three segments, including Rs 160.60 crore for space and defence segment. It has an Rs 80.2-crore order book for the clean energy segment from Bloom Energy and Rs 93.2 crore from Nuclear Power Corp.
Shares ended the trading day with gains of 88.26% at Rs 1,082.5.
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