MTAR Technologies, a precision engineering solutions company, opens its initial public offering (IPO) for subscription on March 3 with a price band of Rs 574-575 per share.
The public issue consists of a fresh issue of Rs 124 crore by the company and an offer for sale of Rs 473 crore by promoters and investors. The net fresh issue proceeds will be used for debt repayment, working capital requirements and general corporate purposes, while the offer for sale money will go to the shareholders who offload their stake.
All the brokerages and analysts Moneycontrol spoke to advised subscribing to the issue for listing gains, short term as well as for long-term investment citing decent financials, government's focus on manufacturing sector, positive sentiment in the space & defence sectors with no listed peers.
"At the upper band of the issue price, MTAR will trade at a Price/EPS multiple of 23.3x of its annualized 9MFY21 revenue, which is at a discount to its listed peer like Schaeffler India (55.5x), SKF India (41.1x), Timken India (33.9) and L&T (40.2x)," said KR Choksey, which believes that current price band is undervalued.