MTAR Technologies IPO Review (Subscribe for Long Term)
MTAR Technologies is a leading national player in the precision engineering industry in India. The MTAR Technologies IPO would open for subscription on March 3rd, 2021. Company is consistent paying dividends in the last 3 years including FY21. Should you invest in MTAR Technologies IPO? Let me provide some of the FAQs about this IPO and provide review and analysis in this article.
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What is a MTAR Technologies IPO?
MTAR Technologies is a leading national player in the precision engineering industry. It is coming up with IPO now for Rs 596.4 Crores which includes Offer for sale + Fresh issue.
When MTAR Technologies IPO would open?
MTAR Technologies IPO would open on 3rd March, 2021 and closes on 5th March, 2021.
What is the lot size of MTAR Technologies IPO?
One can apply MTAR Technologies IPO in the lot size of 26 shares. Minimum order is 26 shares and in multiples of 26 shares there-off.
When is MTAR Technologies IPO allotment?
MTAR Technologies IPO would get closed on 5th March, 2021. Post this, finalization of IPO shares would happen on March 10, 2021. Shares would be credited into demat account by March 15, 2021.
When is MTAR Technologies IPO listing?
This IPO listing is tentatively on March 16, 2021.
What is MTAR Techno Grey Market Premium (GMP)?
MTAR Techno IPO GMP is at 43%.
What is the tentative dates / schedule for a MTAR Technologies IPO?
|MTAR Technologies IPO Schedule|
|Finalization of Allotment||10-Mar-21|
|Initiation of Refunds||12-Mar-21|
|Credit to Demat Account||15-Mar-21|
|IPO Shares Listing Date||16-Mar-21|
Why to invest in this IPO?
Here are a few reasons to invest.
1) MTAR Technologies is a leading national player in the precision engineering industry in India.
2) The company has strong revenue growth in the last 3 years.
3) It generates stable margins in the last few years.
4) The company has been paying dividend in the last 3 years, including FY21.
Why not to invest in IPO?
Here are some negative factors in this IPO.
1) The company depends limited number of customers for a significant portion of its revenue.
2) The company depends significantly on orders from NPCIL, ISRO and DRDO. Any decline or prioritization of funding by Indian budget towards other departments, the company would adversely impact.
3) Covid-19 and further deterioration of general economic conditions would impact company business.
4) Pricing pressure from customers may adversely affect its profits.
How are MTAR Technologies IPO price Valuations?
1) On the upper price band of Rs 575 and EPS of Rs 11.11 for FY20, the P/E ratio works out to be 51.7x.
2) For the last 3 years average EPS of Rs 10.51, the P/E ratio is 54.7x.
3) If we annualize its 9 months ending Dec-20 EPS for FY21, the P/E works out to be 41x.
4) Means, the company asking price of Rs 575 the upper price band in the P/E range of 41x to 54.7x.
5) There are no listed peers who are working in similar business, hence we cannot ascertain whether the issue price is under priced or overpriced. However, considering over 40x P/E, definitely this is overpriced.
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MTAR Technologies IPO Review – Should you invest?
MTAR Technologies is a leading national player in the precision engineering industry in India.
MTAR Technologies have stable revenue growth in the last 3 years and 9 months. Its generating consistent margins (except for FY19 which were high). More than 50% of its business is exports and with high margins.
The issue price is over priced. In the current bull run, I know that investors would still apply even when such IPO’s are overpriced.
High Risk Investors can apply for long term perspective. Short term investors + moderate/Low risk investors can avoid such IPOs.
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Can you let me know how allotment is done in Hni/nii category i.e above Rs 2 lac application. As you know the probability of days getting via retail category..is very less.?
Allotment process would be done by BLRM in consultation with stock exchanges in case of oversubscription.