The initial public offering (IPO) of Tega Industries continues to elicit a good response, with the issue subscribed 219.04 times on the final day on December 3. Bids had come in for 209.58 crore equity shares against an offer size of 95.68 lakh.
Tega is a leading manufacturer and distributor of specialised critical-to-operate consumables for the global mineral beneficiation, mining and bulk solid handling industry.
The IPO has seen strong demand for all investors. The retail portion has been subscribed 29.44 times and the non-institutional investors one 666.19 times. Qualified institutional investors have put in bids 215.45 times their allotted quota.
Tega Industries launched its Rs 619-crore initial public offering for subscription on December 1. It is a complete offer-for-sale of 1.36 crore equity shares. The company already mopped up Rs 186 crore from anchor investors.
The price band for the offer has been fixed at Rs 443-453 a share.
“At the higher price band of Rs 453, the issue is priced at a P/E (price-to-earnings) ratio of 22x on FY21 EPS. Mentioned peer, as per RHP, namely AIA Engineering, currently trades at a P/E of 30x. On P/Sx (price-to-sales) basis, at demanded valuation of Rs 3,003 crore, the issue is available at a P/Sx of 2.9 on FY23, compared to AIA Engineering of P/Sx of 4.7 FY23,” said Choice Broking.
Also read: Tega Industries IPO: Should you subscribe to it?
The brokerage said the company’s growth prospects appeared optimistic, given Tega’s presence in consumable products required for the mining of gold and copper and have strong demand drivers due to higher use in electronics and electric vehicles.
“Stable fundamentals, long-term visibility of revenue, niche operating segment and lower competition are key business positives which drive our optimism. Considering all these parameters, we assign ‘subscribe’ rating to the issue,” the brokerage said.
Also read: Tega Industries IPO: 10 key things to know about the company, issue
The company has a portfolio of more than 55 products, which are used across different stages of mining and mineral processing, screening, grinding and material handling. It is the second-largest producer of polymer-based mill-liners and the only player providing a hybrid liner across both large SAG mill and Ball mill.
The global crushing, screening and mineral processing market was estimated at $20 billion in 2020. The sector is expected to average an annual growth rate of 6.3 percent and to reach $36.9 billion by 2030.
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