MTAR Technologies IPO, which got fully subscribed on Wednesday itself, saw a rise, thanks to strong secondary market trend.
Started in 1999, MTAR Technologies is a leading national player in the precision engineering industry. It is primarily manufacturing mission-critical precision components with close tolerance and in critical assemblies through its precision machining, assembly, specialized fabrication, testing, and quality control processes.
MTAR Technologies IPO Details
|IPO Opening Date||Mar 3, 2021|
|IPO Closing Date||Mar 5, 2021|
|Issue Type||Book Built Issue IPO|
|Face Value||₹10 per equity share|
|IPO Price||₹574 to ₹575 per equity share|
|Market Lot||26 Shares|
|Min Order Quantity||26 Shares|
|Listing At||BSE, NSE|
The GMP of MTAR technologies stood at Rs 435 over the IPO price band of Rs 574-575. By 2 pm, 03 Mar 21, the IPO had received bids for 1,65,03,240 shares, which was 2.27 times the issue size of 72,60,694 shares. The stock enjoyed a bumper grey market premium of Rs 430 on Tuesday.
Company Financials (in brief):
|Details||For the year/period ended (₹ in million)|
|Profit After Tax||280.69||313.18||391.99||54.23|
Read all the details of company:
Name of Promoters
As on the date of Red Herring Prospectus, Promoters of MTAR technologies are
Parvat Srinivas Reddy, P. Leelavathi, K. Shalini, D. Anitha Reddy, C. Usha Reddy, G. Kavitha Reddy, Anushman Reddy, P. Kalpana Reddy, Saranya Loka Reddy, A. Manogna and M. Madhavi.
Primary business of our MTAR Technologies
We are a leading precision engineering solutions company manufactured mission critical precision components with close tolerances (5-10 microns), and 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 (Source: Company Commissioned CRISIL Report). We primarily serve customers in the clean energy, nuclear and space and defence sectors.
Which industry MTR technologies operates?
The domestic precision engineering industry’s turnover is estimated at ₹ 4,415 billion for fiscal 2019, clocking a CAGR of 7.1% between fiscals 2016 and 2020. India’s manufacturing GVA makes up 17-18% of the total GVA; it increased from 17.4% in fiscal 2012 to 18.1% in fiscal 2020. The precision engineering industry will benefit from supportive government policies for manufacturing and engineering sectors. It will also gain from growth in the machinery and equipment industry and rise in penetration of high technology machinery for manufacturing.
We expect precision engineering to log 6-7% CAGR between fiscals 2020 and 2025 to reach ₹ 5,550-6,550 billion by fiscal 2025 (Source: Company Commissioned CRISIL Report).We expect precision engineering We expect precision engineering
The following table summarizes details of the Offer:
|Offer of Equity Shares||Up to 10,372,419 Equity Shares, aggregating up to ₹ [●] million|
|(i) Fresh Issue||Up to 2,148,149 Equity Shares, aggregating up to ₹ [●] million|
|(ii) Offer for Sale||Up to 8,224,270 Equity Shares, aggregating up to ₹ [●] million|
|Equity Shares outstanding prior to the Offer||28,611,442 Equity Shares|
|Equity Shares outstanding after the Offer||30,759,591 Equity Shares|
Registered and Corporate Office of our Company
The address and certain other details of our Registered and Corporate Office is:
18, Technocrats Industrial Estate
Balanagar, Hyderabad 500 037
Tel: +91 40 4455 3333
Company Registration Number and Corporate Identity Number
The registration number and corporate identity number of our Company are:
Registration number: 032836
Corporate identity number: U72200TG1999PLC032836
Board of directors of MTAR technologies
The following table sets out the brief details of our Board of MTAR technologies:
|Name and designation on the Board||DIN||Address of Director|
|Subbu Venkata Rama Behara|
(Chairperson and Independent Director)
|00289721||House 23, Road 1, Shanti Niketan, Chanakya Puri, New|
|Parvat Srinivas Reddy|
|00359139||House No. 7-1-214/14/12, Ameerpet, Dharam Karam Road, Secunderabad 500016, Telangana|
|Venkatasatishkumar Reddy Gangapatnam|
|06535717||House No. 592, Road No. 12, Banjara Hills, Hyderabad 500034, Telangana|
|Praveen Kumar Reddy (Additional Director)||08987107||321/A23, Road No 25A, Behind Obul Reddy School,|
Jubilee Hills, Shaikpet, Hyderabad 500033, Telangana
|Gnana Sekaran Venkatasamy|
|02012032||12-2-505/506, Flat No. 501, Vijayasree Appartments,|
Santosh Nagar Colony, Gudimalkapur, Near St. Anne’s College, Mehdipatnam, Asifnagar, Hyderabad 500028
|01903606||Imperial, 1908, North Tower, B. B. Nakashe Marg, Tardeo,|
Book Building Process
Book building, in the Offer’s context, refers to the process of collection of Bids from investors based on this Red Herring Prospectus and the Bid cum Application Forms within the Price Band. Our Company and the Selling Shareholders, in consultation with the BRLMs, and if not disclosed will decide the Price Band
in this Red Herring Prospectus, will be advertised in all editions of Financial Express, an English national daily newspaper, all editions of Jansatta, a Hindi national daily newspaper and the Hyderabad edition of Surya, a Telugu newspaper, Telugu being the regional language of Telangana where our Registered and Corporate Office is located, each with wide circulation, at least two Working Days prior to the Bid / Offer Opening Date and shall be made available to the Stock Exchanges for uploading on their respective websites. Our Company and the Selling Shareholders, in consultation with the BRLMs after the Bid shall determine the Offer/ Offer Closing Date.
All investors, other than Anchor Investors, shall only take part through the ASBA process by providing the details of their respective ASBA Account in which the SCSBs will block the corresponding Bid Amount.
Retail Individual Bidders shall take part through the ASBA process, either by (i) providing the details of their respective ASBA Account in which the SCSBs will block the corresponding Bid Amount; or (ii) using the UPI Mechanism. It does not permit anchor Investors to take part in the Offer through the ASBA process.
Capital structure of MTAR technologies
The Equity Share capital of our MTAR technologies as on the date:
Promoter Holdings of MTAR technologies
These are the details of promoter holding of MTAR technologies
Company’s revenue sources
A significant proportion of MTAR Technologies’ revenues have been historically deriving from Bloom Energy, our top customer in terms of contribution to our revenue from operations. The contribution of Bloom Energy as a percentage of the revenue from operations of our Company for the Fiscals ended March 31, 2018, March 31, 2019 and March 31, 2020, and the nine months ended December 31, 2019 and December 31, 2020 is 49.14%, 61.43%, 64.53%, 71.01% and 49.33% respectively. There is no guarantee that we shall keep the business of Bloom Energy or maintain our current levels of business with them in the future. In the event there is an adverse change in the supply chain strategies of Bloom Energy, or a reduction in their outsourcing of the products we offer, or if they choose our competitors over us, our revenues shall be impacted adversely, which may lead to a significant impact on our financial condition and cash flows.
In addition, our Company relies on a few customers for a considerable portion of the rest of our revenue. It has associated some customers with them for over four decades. Our long-standing relationship with customers such as Bloom Energy, the Nuclear Power Corporation of India Limited (“NPCIL”), the Indian Space Research Organization (“ISRO”) and the Defence Research and Development Organisation (“DRDO”) is because of us being continually and successfully able to supply complex products to them. MTAR Tech have been supplying products such as liquid propulsion engines to ISRO for over three decades and critical components to DRDO for over four decades.
As at December 31, 2020, our Company catered to 39 customers. Of these, the contribution of our top three customers as a percentage of revenue from operations of the Company during the Fiscals 2018, 2019 and 2020, and in the nine months ended December 31, 2019 and December 31, 2020 is:
|Sl No||Customer||% contribution in the|
revenue from operations
|02||Nuclear Power Corporation of India Limited||29.99|
|03||Liquid Propulsion Systems Centre, Indian Space Research Organization||8.08|
|Sl No||Customer||% contribution in the|
revenue from operations
|02||Nuclear Power Corporation of India Limited||12.29|
|03||Liquid Propulsion Systems Centre, Indian Space Research Organization||11.15|
|Sl No||Customer||% contribution in the|
revenue from operations
|02||Nuclear Power Corporation of India Limited||10.95|
|03||Liquid Propulsion Systems Centre, Indian Space Research Organization||8.07|
Risks involved with MTAR technologies
Reliance on a few customers for business may involve several risks. These risks may include, but are not limited to, reduction, delay or cancellation of orders from our top three customers; failure to negotiate favourable terms with these key customers; losing one or more of these customers because of changes in their supply chain strategy, reduction in their outsourcing requirements or preference being given to our competitors, or otherwise; all of which would have a material adverse effect on the business, financial condition, results of operations, cash flows and future prospects of our Company. In order to keep some of our existing customers, it may also require us to offer terms to such customers which may place constraints on our resources.
Presently MTAR Technologies derive and expect to continue to derive a significant amount of our revenue from work performed for the NPCIL, ISRO and DRDO. However, their orders to us depend upon the continuing availability of budgets extended to the respective departments of the Government of India under which these customers operate. Our future revenues are reliant on the continuing availability of such budgetary appropriations and any disruptions or
reductions to the availability of such appropriations or unavailability of funds to such departments, could have an adverse impact on the funding of these orders and adversely affect our revenues.
We do not have long-term supply agreements with our customers and instead rely on short-term purchase orders to govern the volume and other terms of our sales of products. The purchase orders we receive from our customers specify the price per unit, delivery schedule, and the deliverable quantities. However, while they have not amended or cancelled such orders previously, they may amend or cancel in the future. While we procure raw materials only upon receipt of purchase orders from our customers, should there be an amendment or cancellation of such purchase orders, our revenue and production schedules may be adversely impacted.
Strength of the company
MTAR Technologies is a precision engineering solutions company manufactured mission critical precision components with close tolerances (5-10 microns), and in critical assemblies, to serve projects of high national importance, through our precision machining, assembly, testing, quality control, and specialized fabrication competencies. Given our products and the sectors which we cater to, our customers have high and exacting standards for product quality and delivery schedules. Adherence to quality standards is a critical factor in our manufacturing process as any defects in the products manufactured by our Company or failure to comply with the technical specifications or quality standards of our customers may lead to cancellation of the orders placed by our customers. Further, any failure to make timely deliveries of products in the desired quantity as per our customers’ requirements could also result in the cancellation of orders placed by our customers and may adversely affect our reputation and goodwill.
Strong order-book of MTAR Technologies
Our Order Book in hand, as of a certain date, represents the total value of contracts that have not been executed as of such date. As on December 31, 2020, our Company’s aggregate Order Book was ₹ 3,361.91 million, comprising Order Book in the clean energy sector, the nuclear sector and the space and defence sectors, of ₹
801.86 million, ₹ 931.86 million and ₹ 1,606.10 million, respectively. The successful conversion of these orders into our revenue depends on several factors including absence of adverse changes in the sectors we serve, our production capacity, our research and development and our ability to deliver the products on time. Some factors are beyond our control and by nature, are subject to uncertainty. While there have been no instances of cancellation of purchase orders in the past, from now on, delays, cancellations and the renegotiations of the contracts may affect our Order Book and therefore, we cannot assure you we will deliver all of our existing orders on schedule and successfully turn them into our revenue.
Therefore, you should not consider company’s order Book as an accurate indicator of our future performance or future revenue. Our Company is establishing an additional manufacturing facility at Adibatla in Hyderabad which shall be a sheet metal facility and shall allow us to undertake sheet metal jobs for Bloom Energy, ISRO and certain other customers. Our Company is also planning to construct an additional shed for specialized fabrication to supply products to our domestic and our international customers. If our Company cannot build up a robust Order Book or our customers do not place any significant orders with us or at all, as required for these projects, our cash flows may be significantly adversely impacted.
Company have flourished in the last few years. Our total income and restated profit for the year have increased from ₹ 1,605.45 million and ₹ 54.23 million in Fiscal 2018, to ₹ 2,181.42 million and ₹ 313.18 million in Fiscal 2020, at a CAGR of 16.56% and 140.31%, respectively.
COVID-19 impact on company’s business
Company experienced operational disruptions because of:
• A temporary shutdown of our manufacturing facilities because of government restrictions or illness in connection with COVID-19
• A decrease in demand for our products because of COVID-19 on account of government restrictions imposed and additionally on account of cost control measures implemented by our customers
• Supply chain disruptions for company and its customers
• A significant percentage of our workforce being unable to work, including because of travel or government restrictions in connection with COVID-19, including a stay at home orders
• Delays in orders or delivery of orders, which will negatively impact our cash conversion cycle and ability to convert our backlog into cash
• Our strategic projects getting postponed or our planned deliveries being delayed
• inability to collect full or partial payments from some customers because of deterioration in customer liquidity.
Company’s capabilities and productions
MTAR Tech own a large range of sophisticated equipment, resulting in increased fixed costs to our Company.
The significant end-to-end capabilities of our manufacturing facilities are set forth below:
• Manufacturing of precision components with close tolerances to the extent of 5-10 microns supported by a series of high-end machines such as 7 axis Mill-turns, 5 axis vertical machining centers (“VMCs”), 4.5 axis machining centres, milling centres, turning centres, grinding centres, tool room machines, deep hole boring
and honing machines, among others
• Assembly and testing capabilities supported by 10,000 class clean rooms with facilities for high as well low temperature, vibration, flow and helium leak tests
• Specialized fabrication facilities supported by conventional and orbital welding facilities, vacuum brazing, water jet and plasma cutting facilities to meet American Society of Mechanical Engineers (“ASME”) standards / American Society for Testing and Materials (“ASTM”) standards
• Surface treatment, heat treatment facilities and special processes facilities.
Company Secretary and Compliance Officer
Shubham Sunil Bagadia is the Company Secretary and Compliance Officer of our Company. His contact details are:
Shubham Sunil Bagadia
Flat No J3, Airline Towers
P. G. Road, Sindhi Colony
Secunderabad 500 003
Tel: +91 40 4455 3333
Registrar to the offer
KFin Technologies Private Limited
(formerly known as “Karvy Fintech Private Limited”)
Selenium, Tower B, Plot No 31 and 32,
Financial District, Nanakramguda, Serilingampally
Hyderabad, Rangareddi 500 032
Telephone: +91 40 6716 2222
Investor grievance e-mail: email@example.com
Contact Person: M. Murali Krishna
SEBI Registration No: INR000000221
Book Running Lead Managers
JM Financial Limited
7th Floor, Cnergy
Appasaheb Marathe Marg
Prabhadevi, Mumbai 400 025
Tel: + 91 22 6630 3030
Investor grievance e-mail: firstname.lastname@example.org
Contact Person: Prachee Dhuri
SEBI Registration No: INM000010361
IIFL Securities Limited
10th Floor, IIFL Centre
Kamala City, Senapati Bapat Marg,
Lower Parel (West), Mumbai 400 013
Tel: + 91 22 4646 4600
Investor grievance e-mail: email@example.com
Contact Person: Devendra Maydeo / Sachin Jagad
SEBI Registration No: INM000010940
JM Financial Services Limited
Ground Floor, 2, 3 and 4, Kamanwala Chambers
Sir P. M. Road, Fort
Legal counsel to MTAR technologies
Khaitan & Co
7th & 8th Floors
Sector 16B Noida
Gautam Budh Nagar 201 301
Uttar Pradesh, India
Tel: +91 120 479 1000
Legal counsel to the Book Running Lead Managers as to Indian law
1502B, 15th FloorTower–1C, “One Indiabulls Centre”
Senapati Bapat Marg
Lower Parel, Mumbai 400 013
Tel: +91 22 4920 7200
Legal counsel to the Selling Shareholders
Desai & Diwanji
Lentin Chambers, Dalal Street
Fort, Mumbai 400 001
Tel: +91 22 3984 1000
Banker (s) to our MTAR technologies
State Bank of India
IFB Branch, Raj Bhavan Road
Somajiguda, Hyderabad 500 082
Tel: 040 2314 7241
Contact Person: Hemanth Kumar Padarthi
Axis Bank Limited
Tarnaka Branch, Plot no.12-5-149/17
Opp: Railway degree college, Hyderabad 500 017
Tel: + 91 81422 00272 / +91 40 2700 2118
Contact Person: Keti Kishore
FAQ on MTAR technologies IPO
After applying in MTAR technologies IPO you might have various questions in your mind. We are addressing few of queries we got on our website through google search on various topics regarding MTAR technologies.
1. What is listing date of MTAR technologies
Ans. Mtar technologies is listing on Mar 16, 2021.
2. When will I get allotment of mtar ipo
Ans. You will get allotment of mtar on Mar 10, 2021.
3. Where can I check my IPO allotment status?
Ans. You can check your allotment status online at “go to the BSE website or NSE website here”
4. What are the chances of getting IPO allotment?
Ans. Nowadays every IPO is getting a huge response from retail participants. Retail investors and DII subscribed MTAR technologies IPO more than 200x.
If you apply IPO with single lots in more Demat Accounts than Possibility of successful allotment swells more, compared to if you make one application of maximum lots. It is best to ask friends and family members to open Demat Accounts and apply in upcoming IPOs.
Discount brokers are opening demat account online in five minutes.
5. What is grey market premium of MTAR ipo?
Ans. Grey market premium of MTAR technologies on Mar 09,2021 is Rs 450/- per share.
6. Is IPO allotment first come first serve?
IPO allotment doesn’t take place because of who applied first or the first come, first serve basis. Basis of IPO allotment depends on subscription figure. If an IPO is under-subscribed or less subscibed then all the applicants will get allotment.
7. Mtar technologies ipo allotment status. Can I get allotment?
As MTAR technologies is subscribed by 200x, therefore allotment chances are very less. Check your allotment status.
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