MTAR Technologies Limited (MTAR) is a leading precision engineering solutions company engaged in manufacturing precision components. The company serves customers in clean energy, nuclear, space and defence sectors. Its initial public offer (IPO) opens up for subscription on March 3rd, 2021.
The company contributes to the Indian civilian nuclear power programme, Indian space programme, Indian Defence and Aerospace sector. It also contributes to the global clean energy sector and the global defence and aerospace sector as well.
MTAR Technologies works with esteemed set of clients
As one of the vital customer sectors, there is immense focus on clean energy. MTAR is engaged in the manufacture of power units, especially hot boxes, and in developing and manufacturing hydrogen boxes and electrolyzes for Bloom Energy Inc. in the United States. The Clean energy sector contributes to a significant portion of company revenues.
In the nuclear sector, the company is working with the Nuclear Power Corporation of India Ltd. (NPCIL). The association has been for over 16 years.
Indian Space Research Organization (ISRO) and the Defence Research and Development Organization (DRDO) have been the primary customers in the space and defence sector. The company has a long-standing relationship for over three-four decades with these esteemed organizations.
MTAR Technologies operate through seven manufacturing facilities, including an export-oriented unit (EOU). These manufacturing units are in Hyderabad, Telangana. The facilities employ advanced equipment to undertake precision machining, assembly, testing and quality control, specialized fabrication, brazing and heat treatment, and other technical processes.
|Space & Defence||20.0%||18.4%|
Competitive landscape in the precision engineering industry
Below is the comparison of the precision engineering and components industry across sectors. These companies work across sectors like automotive components, defence, aerospace, and space.
About the Promoters of MTAR Technologies
Late P. Ravinder Reddy, Late K. Satyanarayana Reddy and P. Jayaprakash Reddy initially promoted the company. Today, one of the promotors, and our Managing Director Parvat Srinivas Reddy, who has close to three decades of experience, lead the company.
- MTAR began operations as a partnership firm in 1970; therefore, it possesses significant experience
- Long-standing relationship with an esteemed set of clients
- Wide breadth of product portfolio
- Seven manufacturing plants
- Highly experienced management team
Please see below the condensed financial information.
Amount in Rs Cr excluding per share data
- Healthy revenues and healthy margins
- Decent return on net worth
- No listed companies in a similar business in India, and therefore peer comparison is not possible
Offer proceeds of the IPO
|Fresh issue of 21,48,149 equity shares||Rs 123 Cr|
|Offer for sale of 82,24,270 eq. shares||Rs 473 Cr|
|Gross issue size||Rs 596 Cr|
Utilization of the offer proceeds:
- Repayment or prepayment in full/part of borrowings availed by the company
- Funding working capital requirements
- General corporate expenses
MTAR Technologies IPO factsheet
Conclusion thoughts for IPO of MTAR Technologies:
- The precision engineering sector is critical for growing industries like nuclear, defence and space, and hence the demand is poised to grow
- MTAR currently offers three kinds of products in the clean energy sector, 14 types of products in the nuclear industry, and six products in space and defence sectors. The company intends to enhance capabilities and grow value chain to supply critical and differentiated engineered products
- Upward trend in the nuclear sector in India, increase indigenization and policy initiatives in the defence sector, and commercialization of the Indian space sector work in favour of the company
- Long-standing working relationship with an esteemed set of clients is a strength area
- Company earns about 55-60% of revenues from customers located out of India and further intends to enhance its international operations
- Healthy order book of Rs 336 Cr
The information provided in the red herring prospectus filed by the company with the Securities and Exchange Board of India (www.sebi.gov.in) is the basis for this note. However, I recommend that the reader validate the data before making any financial decision. Also, investment in an initial public offering (IPO) is subject to market risks. It should be evaluated, keeping your risk profile and investment objective in mind. The author will not be responsible for any financial loss or otherwise resulting from any action taken based on the above.
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2 Replies to “MTAR Technologies Limited IPO details”
Nice Insights Sagar Sir!
Excellent incisive insights Sagar , this helps !