About the Company:
Mishra Dhatu Nigam Ltd (MIDHANI) is one of the leading manufacturers of special steels, Superalloys and only manufacturer of titanium alloys in India.These are high value products which cater to niche end user segments such as defence, space and power.
Company was established in the year 1973, with an aim of achieving self-reliance in the research, development and supply of critical alloys and products of national security and strategic importance.
Company has emerged as a ‘National Centre for Excellence’ in advanced metallurgical production of special metals and Superalloys in India.
Company has the technological ability to manufacture a wide range of advanced metals and alloys under one roof. With the growth of the business and operations,Company have achieved the status of a Mini Ratna, Category-I company in 2009.
They are one of the few metallurgical plants of its kind in the world, designed to manufacture a wide range of special metals and alloys using integrated and highly flexible manufacturing systems.
These special alloys have superior mechanical properties and better workability which are essential for special applications in aerospace, power generation, nuclear, defence and other general engineering industries.
Company manufactures special steels like martensitic steel, ultra high strength steel, austenitic steel & precipitation hardening steel. Company also manufactures three varieties of Superalloys – nickel base, iron base and cobalt base & titanium alloys.
Presently, they conduct their operations at their manufacturing facility in Hyderabad. Company is also in the process of setting up two new manufacturing facilities in Rohtak and Nellore.
Current order book position is Rs.517 crores comprising of Rs.283 crores for defence, Rs.168 crores for space and Rs.66 crores from other sectors.
Product Categories Manufactured by the Company:
Management Team:
- Dr. Dinesh Kumar Likhi (Designation: Chairman and Managing Director)
- Mr.Sanjeev Singhal (Designation: Whole time Director (Finance) and Chief Financial Officer)
- Mr.Sanjay Kumar Jha (Designation: Whole time Director (Production and Marketing))
Future Growth Strategies to be Implemented by the Company:
Growth and Modernisation Plans:
Company seeks growth (through both greenfield and brownfield) and is based on the development of technology for customer and product. Some of the new projects planned in the next three years include:
(a) Proposal for construction of spring manufacturing plant for manufacture and supply of helical compression springs for supply to the Railways.
(b) Development of aero quality carbon fibers.
Geographical Expansion Plans:
Company also aims for geographical expansion and to operate from multiple locations. At present, Company intends to start two new manufacturing units based in Rohtak and Nellore.
Company has signed a memorandum of understanding for setting up a joint venture with NALCO for production of high end value aluminium alloys products at Nellore.
The manufacturing unit in Rohtak will be set up by the Company itself for manufacturing of armour products. Company is also in the process of upgrading and modernizing its existing manufacturing equipments and facilities.
Company also has plans to enter into the new markets of oil and gas, mining, power, railways and chemical and fertilizers. Company is also making efforts to enter into export market which we believe will enable company to achieve higher targets.
Objectives of the Issue:
Offer For Sale (OFS): (Around Rs.438 crores)
- Company will not receive any proceeds from the Offer for Sale by the Selling Shareholders.
Peer Group Comparison:
There are no comparable listed companies in India engaged in the same line of business as Mishra Dhatu Nigam Ltd, hence comparison with industry peers is not applicable.
Positives for the Company:
Most Advanced and Unique Facilities:
Company is the only facility in India to carry out vacuum based melting and refining through world class vacuum melting furnace such as vacuum induction melting, vacuum arc remelting, vacuum degassing/ vacuum oxygen decarburisation, electro slag remelting and electron- beam melting.
Capability to manufacture wide range of Advanced Products:
Company is a manufacturer of special steels and stainless steels, Superalloys (nickel base, iron base and cobalt base), commercially pure titanium and titanium alloys, soft magnetic alloys, controlled expansion alloys, heat resistance alloys, special purpose alloys, refractory metals and other alloys in different shapes, properties and sizes.
Their wide range of products and ability to meet the specific customer needs enable them to successfully service core strategic sectors such as defence, nuclear/ power and aerospace.
The other important factor is that the Company’s products are key ingredients for strategic sectors in India, which typically cannot be imported from other countries due to its national security related concerns.
Expecting Orders from Indian aerospace and Defence Sectors:
Company expects significant investments to take place in the Indian aerospace and defence sectors in the next few years, along with other new customer segments such as automotive components, oil & gas industry and the chemical industry.
In the defence space, India is expected to emerge as the third-biggest country in terms of defence-related expenditure from its current (eighth) position by 2020 especially through IDDM (Indigenously Designed, Developed and Manufactured) Make in India initiative to encourage domestic manufacturers to produce high value speciality steel and superalloy grades and supply them to defence and aerospace.
Financials of the Company:
| (in Crores) | FY 13 | FY 14 | FY 15 | FY 16 | FY 17 | 30th Sept 17 |
|---|---|---|---|---|---|---|
| Revenue | 585.2 | 656.2 | 678.4 | 790.4 | 833.1 | 220.6 |
| Net Profit | 93.9 | 97.5 | 103.6 | 119.3 | 126.3 | 27.3 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 21st March 2018 |
| Issue Closes on:. | 23rd March 2018 |
| Issue Price | Rs.87 – 90 |
| Retail Portion | 35% |
| Retail & Employee Discount | Rs.3 per Share |
| Face Value | Rs.10 |
| Minimum Lot | 150 |
| Minimum Investment | Rs.13,500 |
| Issue Constitutes | 26% |
| Issue Size | Rs.438 cr |
| Market Cap | Rs.1686 cr |
| Listing at | NSE & BSE |
| Equity Shares Offered (OFS) | 4,87,08,400 |
| Equity Shares Prior to the Issue | 18,73,40,000 |
| Equity Shares after the Issue | 18,73,40,000 |
Important Dates:
| Finalization of Basis of Allotment | on or Before 28th March 2018 |
| Initiation of Refunds | on or Before 2nd April 2018 |
| Credit of Equity Shares: | on or Before 3rd April 2018 |
| Listing Date: | on or Before 4th April 2018 |
Subscription Details:
| (Subscription-Category-Wise (no. of times) Till time : 06:00 PM) | Shares Offered | Day-1 | Day-2 | Day-3 |
|---|---|---|---|---|
| QIB | 2,34,17,500 | 0.45 | 1.09 | 1.96 |
| NII | 70,25,250 | 0.002 | 0.004 | 0.127 |
| Retail | 1,63,92,250 | 0.10 | 0.31 | 0.724 |
| Employee | 18,73,400 | 0.03 | 0.11 | 0.256 |
| TOTAL | 4,87,08,400 | 0.26 | 0.63 | 1.20 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 6.74 | 13.35 | 17.93 | 37.60 |
Markets Guruji Opinion:
| IPO View | Apply For: | Expected listing Gain: |
|---|---|---|
| Subscribe | Long Term | 10% |
Grey Market Premium :
| Date | IPO | Price Band | Grey Market premium | Kostak Rates |
|---|---|---|---|---|
| 16/03/18 | Mishra Dhatu Nigam Ltd | 87 – 90 | 6 – 7 | 650 – 750 |
| Company Contact Info: |
|---|
| Mishra Dhatu Nigam Ltd P.O. Kanchanbagh, Hyderabad – 500 058, Telangana, India Tel: +91-40-24184000 Fax: +91-40-24340214 / 24341250 Email: secretary@midhani.com Website: www.midhani.com |
| IPO Registrar Info: |
|---|
| Alankit Assignments Limited 205-208, Anarkali Complex, Jhandewalan Extension, New Delhi- 110055, India Tel: +91 11-4254 1234; 2354 1234 Fax: +91 11 4154 3474 Email: midhani_ipo@alankit.com Investor email: midhani_igr@alankit.com Website: www.alankit.com |
