Ahead of listing day, MTAR Technologies trades at 90% premium in grey market

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26 Aug, 2025 12:21

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MTAR Technologies, a leading precision engineering solutions company, is likely to see a bumper listing on March 15, with the initial public offering getting a good response, a healthy balance sheet and a hefty grey market premium, say experts.

The company closed its Rs 596-crore public issue on March 5. The issue was subscribed 200.79 times backed by all categories of investors. The share was trading at Rs 1,085-1,095 in the grey market, a premium of 89-90 percent over the issue price of Rs 575 a share, the data available on IPO Watch shows.

"One of the reasons as to why the MTAR Technologies is trading at a premium is because of the fact that is that it is one of a kind company with no comparable peers. Markets are extremely positive on the future prospects of the company and therefore it is commanding such a premium to issue price in the grey market," Jyoti Roy-DVP-Equity Strategist at Angel Broking told Moneycontrol.

The grey market is an unofficial trading platform where shares get traded well before the allotment in the IPO and listed on bourses.​

Most experts say the listing premium could be around 80 percent over and above the issue price.

"Positive market conditions, backed by a robust response from investors across all categories, would lead to a strong listing gain almost in the range of 70-80 percent on issue price (Rs 575) on the back of its unique make in India business model, high operating and profit margins compared to its peers and supportive government initiatives to boost manufacturing sector," Prashanth Tapse, AVP Research at Mehta Equities told Moneycontrol.

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MTAR is well placed to reap the benefits from the government's Make in India push, as it is a leading maker of nuclear, defence and aerospace equipment which justifies the premium listing, he said.

Astha Jain, Senior Research Analyst at Hem Securities, also expects MTAR to list at a 80 percent premium.

MTAR is a leading precision engineering solutions company engaged in the manufacture of mission-critical precision components with close tolerances, and in critical assemblies. Since its inception, the company has expanded its product portfolio, including critical assemblies, and manufactures a wide range of complex product portfolios to meet the requirements of India's nuclear, defence, and space sectors.

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ISRO, NPCIL, DRDO, Bloom Energy and Rafael are some of its key clients. During FY18-FY20, MTAR's revenue grew at a CAGR of 16 percent, EBITDA 35 percent and adjusted profit 140 percent. At the end of Q3FY21, it has a healthy order rbook of Rs 336.2 crore.

"The company's financial performance looks strong with healthy balance sheet position. The company has wide product portfolio along with marquee customer base and a robust order book which gives strong revenue visibility going forward," Astha Jain said.

Prabhudas Lilladher believes MTAR's experience in supplying products, ability to meet customer-specific requirements, a reputation for quality and safety features, good financial strength and price competitiveness will help it leverage its operating efficiencies .

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.