The initial public offering of Tega Industries, the second largest producer of polymer-based mill-liners, has garnered bids for 4.46 crore equity shares against an issue size of 95.68 lakhs, subscribing 4.67 times on December 1, the first day of bidding.
The company mobilised Rs 186 crore from anchor investors on December 1. Subsequently, its issue size was down to 95.68 lakh equity shares, from 1.36 crores.
Retail investors bought 7.51 times of their reserved portion and non-institutional investors portion booked 4.17 times. Qualified institutional investors have put in bids for 7 percent of the reserved portion.
The company plans to raise Rs 619 crore through the public issue at the upper end of the price band of Rs 443-453 per share. This is completely an offer-for-sale by selling shareholders, hence the issue proceeds will go to selling shareholders.
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Marwadi Financial Services has assigned ‘subscribe’ rating to this IPO as the company is a leading producer of specialised and “critical to operate” products, with high barriers to replacement or substitution. “Also, it is available at reasonable valuation as compared to its peer,” it said.
Considering the FY21 adjusted EPS (earnings per share) of Rs 20.58 on a post-issue basis, the company is going to list at a P/E (price-to-earnings) of 22.02 with a market cap of Rs 3,003.1 crore, while its peer namely, AIA Engineering, is trading at a P/E of 30.40, said the brokerage.
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Tega Insutries is a leading manufacturer and distributor of specialised critical-to-operate and recurring consumable products for the global mineral beneficiation, mining and bulk solids handling industry.
It offers a wide product portfolio of specialised abrasion and wear-resistant rubber, polyurethane, steel and ceramic-based lining components, used across stages of mining and mineral processing, screening, grinding and material handling, including aftermarket spends on wear, spare parts, grinding media and power, which are regular operating expenses for customers.
Majority of revenue earned by the company from operations outside India, including North America, South America, EMER (Europe, Middle East and Russia), Africa, and Asia Pacific (South East Asia and Australia).
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