About the Company:
MTAR Technologies is a leading precision engineering solutions company engaged in the manufacture of mission critical precision components.
Company manufactures components which are used in critical assemblies, to serve projects of high national importance, through our precision machining, assembly,
testing, quality control, and specialized fabrication competencies, some of which have been indigenously developed and manufactured.
Company primarily serve customers in the nuclear, space and defence, and clean energy sectors.
Since inception, company has strived to grow continually, contributing to the Indian civilian nuclear power programme, Indian space programme, Indian defence and aerospace sector, global defence and aerospace sector, as well as to the global clean energy sector.
Company is also a key supplier of mission critical components to customers within the space and defence sectors for their programs of national importance.
Company has been serving customers in the nuclear sector for over 35 years, and have established relationships with the Nuclear Power Corporation of India Limited (“NPCIL”) having served them for over 16 years.
Company’s Employee Base:
- As on November 30, 2020, company had 896 permanent employees, including 147 engineers comprising 17.00% of our total employees, and 244 contractual workmen.
Company’s Customers:
- Company’s customers include some of India’s leading organizations in the nuclear, and space and defence sectors such as the NPCIL, Indira Gandhi Centre for Atomic Research, ISRO, and the DRDO, among others.
- In addition, MTAR Technologies also supplies the products to international companies such as Bloom Energy and an Israeli defense technology company, among others.
Long-standing relationships with Customers:
- Company has long-standing relationships of over three decades and four decades with customers such as the Indian Space Research Organisation (“ISRO”) and the Defence Research and Development Organisation (“DRDO”), and have been able to supply specialized products to the Indian space programme and the Indian missile programme, respectively.
Association with “Bloom Energy”.
- Company also focusses on clean energy as one of our key customer sectors and are accordingly, involved in the manufacture of power units, specifically hot boxes, and in the development and manufacture of hydrogen boxes and electrolyzers, to serve Bloom Energy Inc., United States (“Bloom Energy”) with which, company has been associated with, for over nine years.
Company’s Manufacturing Facilities:
- MTAR Technologies currently operates through seven manufacturing facilities, including an export-oriented unit (“EOU”). These manufacturing facilities, each of which is situated in Hyderabad, Telangana, employ advanced equipment to undertake precision machining, assembly, testing, quality control and specialized fabrication thus being a one-stop solutions company for our customers.
Company’s Order Book:
- Company’s aggregate Order Book as on November 30, 2020 was Rs.356 crores, comprising Order Book in the nuclear, space and defence, and clean energy sectors of Rs.93 crores, Rs.172 crores and Rs.86 crores respectively.
Expansion Plans:
- MTAR Technologies is in the process of establishing an additional manufacturing facility at Adibatla in Hyderabad which is expected to become operational in Fiscal 2022.
- This establishment shall be a sheet metal facility which shall allow company to undertake sheet metal jobs for ISRO, Bloom Energy and certain other customers.
Competition in the Business:
- Company operates in a competitive environment and expects to face greater competition from existing competitors located both in India and globally, and in particular from companies in United States and Germany.
- Competitors in nuclear sector are Larsen & Toubro Heavy Engineering and Godrej & Boyce Manufacturing Company Ltd.
- Competitors in the space and defence sectors are Larsen & Toubro,Mahindra Defence Systems, Godrej & Boyce Manufacturing Company Ltd, Hindustan Aeronautics Ltd, and Walchandnagar Industries.
Management Team:
- Mr. Subbu Venkata Rama Behara (Designation: Chairman and Independent Director)
- Mr. Parvat Srinivas Reddy (Designation: Managing Director)
Objectives of the Issue:
Offer for Sale: (Rs. 472.8 cr )
- Company will not receive any proceeds from the Offer for Sale. The Selling Shareholders will be entitled to their respective portion of the proceeds of the Offer for Sale, net of their respective portion of the Offer related expenses.
Fresh Issue: (Rs. 123.5 cr)
- Repayment / prepayment in full or in part, of borrowings availed by the Company
- Funding working capital requirements.
- General corporate purposes.
Peer Group Comparison:
- We believe that none of the listed companies in India are engaged in a portfolio of business similar to MTAR Technologies Ltd. Hence we cannot make any comparison.
Positives for the Company:
Wide Product portfolio leading to long-standing relationships with customers:
- Company has, over the years, developed a wide product portfolio catering to customers in diverse segments as a result of which, company has been able to establish trusted and long-standing relationships with these customers.
- As on November 30, 2020, our major product portfolio includes 14 kinds of products in the nuclear sector, six kinds of products in the space and defence sectors, and three kinds of products in the clean energy sector.
- Company’s long standing relationship of over 16 years with NPCIL bears testimony to Company’s ability to manufacture and supply specialized products.
- Within the space sector, company has established relationship with ISRO to whom MTAR has been supplying a wide variety of mission critical components and critical assemblies for its various missions, for over three decades.
Modern technology & state-of-the-art manufacturing facilities:
- Company operate through seven state-of-the-art manufacturing facilities, including one EOU, each of which, is situated in Hyderabad, Telangana. Hyderabad, Telangana, is one of the key centres for defence research and development in the country.
- The presence of major defense organizations in Hyderabad not only provides MTAR, access to the critical R&D and high-volume projects, but also allows for ease of coordination, specifically in terms of collaborative R&D efforts, as well as for subsequent close monitoring of manufacture and quality control processes, thereby giving an advantage over the other players located in other regions.
Expanding international presence including through increase in exports:
- A certain portion of company’s business operations are focused on exports to international customers. For instance, MTAR is currently involved in the manufacture of power units, specifically hot boxes, and in the development and manufacture of hydrogen boxes and electrolyzers, to serve Bloom Energy.
- Further, Company has recently acquired a new international customer operating in the clean energy sector.
- In addition, MTAR has also supplied critical defence products such as aluminium weldments and other machined components to international customers including, an Israeli defense technology company.
- For the year ended March 31, 2020 the revenue from contracts with customers located outside India amounted to Rs.140 crores , reflecting 67.58% of our revenue from contracts with customers.
Key Positive Observations for MTAR Technologies:
- MTAR Technologies Ltd, is one of the leading players in the nuclear, space and defence and aerospace equipment manufacturing in India.
- MTAR Technologies Ltd cater to end-use segments such as clean energy (fuel cell), nuclear, space, and defence and aerospace industries.
- MTAR Technologies ltd is a supplier to companies such as BHEL (Bharat Heavy Electricals Limited), HAL (Hindustan Aeronautics Limited), Advance system laboratory (DRDO) Godrej and Boyce, Liquid Propulsion Systems Centre (ISRO), and Nuclear Power Corporation of India (NPCIL).
- MTAR is one of the key suppliers to Bloom Energy, which is the largest players in fuel energy space as per 2019 revenues.
- MTAR Technologies Ltd is engaged in manufacture and assembly of critical precision components with close tolerances of 5-10 microns through their competencies in precision machining, assembly, testing, quality control, and specialized fabrication.
- MTAR Technologies Ltd focuses on indigenously manufactured import substitute components such as ball screws, roller screws, and water lubricated bearings. These are specialized components used in space, nuclear, and defence and aerospace sectors.
- Company has been serving customers in the nuclear sector for over 35 years, and have established relationships with the Nuclear Power Corporation of India Limited (“NPCIL”) having served them for over 16 years.
Financials of the Company:
| (in Crores) | FY 18 | FY 19 | FY 20 | 30th Sept 20 |
|---|---|---|---|---|
| Revenue | 160.5 | 185.9 | 218.1 | 122.6 |
| Net Profit | 17.1 | 41.5 | 31.3 | 19.2 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on: | 3rd March 2021 |
| Issue Closes on:. | 5th March 2021 |
| Issue Price | Rs.574 – 575 |
| Face Value | Rs.10 |
| Retail Category Allocation | 35% |
| Minimum Lot | 26 Shares |
| Minimum Investment | Rs.14950 |
| Issue Constitutes | Rs.596.4 cr ($81.6 million) |
| Market Cap | Rs. 1662 cr ($227 million) |
| Listing at | NSE & BSE |
| Equity Shares Offered (Fresh) | 21,48,149 |
| Equity Shares Offered (OFS) | 82,24,270 |
| Total Equity Shares Offered (Fresh + OFS) | 1,03,72,419 |
| Equity Shares Prior to the Issue | 2,67,59,591 |
| Equity Shares after the Issue | 2,89,07,740 |
Also Read : List of Upcoming IPO’s in India.
Important Dates:
| Finalization of Basis of Allotment | On or Before 10th March 2021 |
| Initiation of Refunds | On or Before 12th March 2021 |
| Credit of Equity Shares: | On or Before 15th March 2021 |
| Listing Date: | On or Before 15th March 2021 |
Subscription Details: (Will be Updated)
| (Subscription-Category-Wise (no. of times) Till time : 05:00 PM) | Shares Offered | 3rd March | 4th March | 5th March |
|---|---|---|---|---|
| QIB | 20,74,484 | 0.00 | 0.96 | 164.99 |
| NII | 15,55,863 | 1.02 | 8.04 | 650.79 |
| Retail | 36,30,347 | 6.9 | 16.55 | 28.40 |
| Employee | ———- | —- | —- | —- |
| TOTAL | 72,60,694 | 3.68 | 10.27 | 200.79 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 11.11 | 51.75 | 13.91% | 84.11 |
| Check IPO Allotment Status: |
|---|
KfinTech Website http://kfintech/IPO/Allotment_StatusBSE IPO Website: https://www.bseindia.com/IPO/Allotment |
| Company Contact Info: |
|---|
| MTAR Technologies Ltd 18, Technocrats Industrial Estate Balanagar, Hyderabad 500 037 Telangana, India Tel: +91 40 4455 3333 E-mail: shubham.bagadia@mtar.in Website: www.mtar.in |
| IPO Registrar Info: |
|---|
| KFin Technologies Private Limited Selenium, Tower B, Plot No 31 and 32, Financial District, Nanakramguda, Serilingampally Hyderabad, Rangareddi 500 032 Telangana, India Telephone: +91 40 6716 2222 E-mail: mtar.ipo@kfintech.com Website: www.kfintech.com |
