The initial public offering of Data Patterns India has attracted bids for 2.34 crore equity shares against the IPO size of 70.97 lakh equity shares, being subscribed 3.3 times on December 14, the first day of bidding.
It is among the few vertically integrated defence and aerospace electronics solutions provider catering to the indigenously developed defence products segment. The company’s offerings cater to the entire spectrum of defence & aerospace platforms - space, air, land and sea.
The company plans to raise Rs 588.2 crore through its public issue, of which Rs 176 crore was raised from anchor investors, including HDFC Mutual Fund, ICICI Prudential, Kotak Mutual Fund, Volrado Venture Partners Fund, and Nomura, on December 13.
Retail investors bought 5.89 times of the shares reserved for them, and non-institutional investors have put in bids 1.46 times the allotted quota. Qualified institutional buyers bought 1,650 shares so far, against the reserved portion of 19.58 lakh shares.
Also read: Data Patterns (India) IPO opens: 10 key things to know before subscribing to the public issue
Half of the offer size is reserved for qualified institutional investors, 35 percent for retail investors, and the remaining 15 percent for non-institutional investors.
The Chennai-based specialist in defence & aerospace electronics system will close its public issue on December 16. It comprises a fresh issue of Rs 240 crore and an offer for sale of Rs 348.2 crore.
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The price band for the offer is Rs 555-585 per equity share.
The company will utilise net proceeds from the fresh issue for repaying debt, working capital requirement and upgrading and expanding manufacturing facilities in Chennai.
"At the higher price band of Rs 585, the company is demanding a TTM P/E (trailing twelve months - price-to-earnings) multiple of 35.6x, which is at a premium to the peer average of 30x (excluding Dynamatic Technologies, MTAR Technologies and Paras Defence & Space Technologies). Thus, the issue seems be fully priced," said Choice Broking.
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"However, with favourable macros and a diversified product profile, the company has the potential to expand its business and earnings. Thus, we assign a “subscribe for long term” rating for the issue," the brokerage added.
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