About the Company:
Bharat Dynamics is one of the leading defence PSUs in India engaged in the manufacture of Surface to Air missiles (SAMs), Anti- Tank Guided Missiles (ATGMs), underwater weapons, launchers, counter measures and test equipment.
Founded in 1970, they have over four decades of experience in manufacturing missiles and countermeasures and its allied equipments.
Company is the sole manufacturer in India for SAMs, torpedoes, ATGMs. They are also the sole supplier of SAMs and ATGMs to the Indian armed forces.
Additionally, Company is also engaged in the business of refurbishment and life extension of missiles manufactured. They are also the co-development partner with the DRDO for the next generation of ATGMs and SAMs.
They are a wholly-owned GoI company headquartered in Hyderabad and under the administrative control of the MoD (Ministry of Defence), GoI (Government of India) and were conferred the ‘Mini-ratna (Category -1)’ status by the Department of Public Enterprises, GoI.
They currently have three manufacturing facilities located in Hyderabad, Bhanur and Vishakhapatnam.
The Hyderabad manufacturing unit is engaged in the manufacture of SAMs, Milan 2T ATGMs, countermeasures, launchers and test equipment.
The Bhanur unit is engaged in the manufacture of the Konkurs – M ATGMs, the INVAR (3 UBK 20) ATGMs, launchers and spares.
The Vishakapatnam unit is engaged in the manufacture of light weight torpedoes, the C-303 anti torpedo system, countermeasures and spares.
All their manufacturing facilities have ISO 14001:2004 certifications from TUV India Private Limited.
Company is also in the process of setting up two additional manufacturing facilities at Ibrahimpatnam (near Hyderabad) and Amravati in Maharashtra which shall be used to manufacture SAMs and Very Short Range Air Defence Missiles (VSHORADMs) respectively.
Company’s current order book as of January 31, 2018 is Rs.10,543 crores.
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Competition in the Business:
They operate in a competitive environment and currently they face competition from existing competitors located globally in particular defence companies based in Europe and the United States of America such as Boeing, Raytheon, Lockheed Martin, Rafael Advanced Defense Systems Limited and Roketsan.
Company has been nominated by the GoI as the production agency for some of their products. However with the implementation of the Defence Procurement Procedure, 2016, Company expects that the GoI will allow private sector companies to manufacture missiles, torpedoes and counter measures.
- Mr.Udaya Bhaskar Varanasi (Designation: Chairman and Managing Director)
- Mr.Piramanayagam Subrahmaniam (Designation: Director (Finance) and Chief Financial Officer)
- Mr.Voleti Gurudatta Prasad (Designation: Director (Production))
Special Thanks: We would like to thank the Management Team of Bharat Dynamics Ltd for inviting Markets Guruji Team to the IPO Press Conference & Listing Ceremony.
Objectives of the Issue:
OFS (Offer for Sale): (Around Rs.960.94 crores)
- Company will not receive any proceeds from the Offer for Sale by the Selling Shareholders.
Peer Group Comparison:
Company is engaged in the business of manufacturing missiles. There are no listed peers in India which are engaged in a similar line of business as the Company, hence comparison with industry peers is not applicable.
Positives for the Company: (In the Current war like situation , this Stock is likely to give good returns. )
Increase in Indigenisation of products and implementation of the “Make in India” policy:
In order to give an impetus to the GoI’s “Make in India” policy,Company had implemented a vendor development policy in 2015.
The implementation of this policy has enabled them to improve their supply chain management in order to meet the long term commitments to the primary customer(ie.Ministry of Defence).
Strong order book and established financial track record of delivering growth:
Company’s revenue from operations and profit for the year has increased from Rs.2,840.8 crores and Rs.443.5 crores respectively, in Fiscal 2015 to Rs.4832.7 crores and Rs.490.3 crores, respectively, in Fiscal 2017 at a CAGR of 30.43% and 5.14% respectively. Company has consistently declared dividends for the last five Fiscals.
Continue to invest in Infrastructure:
Company is continuously investing in infrastructure in terms of their upcoming manufacturing facilities at Ibrahimapatnam and Amravati, which will enable them to cater to the growing demand of the customers. Company’s proposed Ibrahimapatnam and Amravati manufacturing facilities shall be utilised to manufacture SAMs.
They also intend to automate their production systems at their manufacturing facility in Hyderabad to increase the production of SAMs.
Company is also in the process of establishing a test fire range in Rachakonda, Telangana which will result in operational advantages and cost efficiencies.
Plans to Develop New Products:
Company intends to leverage their experience to develop new products such as new generation SAMs (Surface to Air Missiles), ATGMs(Anti Tank Guided Missile), and heavy weight torpedoes which will enable them to further increase their revenues. They are also the joint development partner with the DRDO for the next generation of ATGMs and SAMs.
The MoD has identified them as the production agency and the lead integrator for one of the new generation of SAMs. Company has also entered into several MoUs and non-disclosure agreements with various companies for developing new products and transfer of technologies.
Development of new products will enable them to diversify their offerings and help them reduce their reliance on their current products.
Plans to Supply their Product offerings to the International Market:
The GoI is encouraging Company for export of their products. Company intends to interact with potential overseas customers with a view to exporting their products and thereby reduce their reliance on the GoI for future orders.
Financials of the Company:
|(in Crores)||FY 13||FY 14||FY 15||FY 16||FY 17||30th Sept 17|
|Issue Opens on||13th March 2018|
|Issue Closes on:.||15th March 2018|
|Issue Price||Rs.413 – 428|
|Retail Discount||Rs.10 Per Share|
|Minimum Investment||Rs.14,980 (D: Rs.14,630)|
|Issue Size||Rs.960.94 cr ($148.8 million)|
|Market Cap||Rs.7,801 cr ($1.2 billion)|
|Listing at||NSE & BSE|
|Total Equity Shares Offered (OFS)||2,24,51,953|
|Equity Shares Prior to the Issue||18,32,81,250|
|Equity Shares after the Issue||18,32,81,250|
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|Finalization of Basis of Allotment||on or Before 20th March 2018|
|Initiation of Refunds||on or Before 21st March 2018|
|Credit of Equity Shares:||on or Before 22nd March 2018|
|Listing Date:||on or Before 23rd March 2018|
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|(Subscription-Category-Wise (no. of times) Till time : 06:00 PM)||Shares Offered||Day-1||Day-2||Day-3|
IPO Valuation Parameters:
|Earnings Per Share (EPS)||Price To Earnings ratio (PE)||Return on Net Worth (RoNW)||Net Asset Value (NAV)|
Markets Guruji Opinion:
|IPO View||Apply For:||Expected listing Gain:|
Grey Market Premium :
|Date||IPO||Price Band||Grey Market premium||Kostak Rates|
|07/03/2018||Bharat Dynamics Ltd||413 – 428||29 – 33||800 – 950|
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|Company Contact Info:|
|Bharat Dynamics Limited
Kanchanbagh, Hyderabad – 500 058
Telephone: +91 40 2434 0352
Facsimile: +91 40 2434 0660
|IPO Registrar Info:|
|ALANKIT ASSIGNMENTS LIMITED
Address: 205 – 208, Anarkali Complex,
New Delhi, 110 055, India.
Telephone: +91 11 4254 1234
Facsimile: +91 11 4154 3474