After seeing a record rush from qualified institutional buyers (QIB) for its public offering, Tega Industries is slated to go listed on December 13.
The company 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.
Its first public issue, floated on December 1, broke all records of subscription from QIBs in the last decade. By the closing on December 3, the QIB portion was booked 215.5 times, while the issue was oversubscribed by 219 times.
HDFC Asset Management Company Ltd held the record so far with the QIB portion subscribed 192.3 times during July 25-27, 2018. It was followed by Indigo Paints at 189.6 times and Tatva Chintan, which was subscribed 185.2 times.
The allotment of Tega Industries shares was finalised on December 8 and the share would be credited to the investors’ demat accounts on December 10.
The Tega IPO is still garnering a lot of attention with investors willing to pay a premium to the offer price before listing. As per IPO Watch, which tracks the grey market, the issue is commanding a premium of Rs 300.
The retail portion of the public issue has been subscribed 29.4 times and the portion for non-institutional investors was booked 666.2 times.
The primary offer of the company amounting to Rs 619.23 crore was entirely an offer-for-sale (OFS) of 1.37 crore equity shares offloaded by the existing shareholders and promoters. The price band for the offer was fixed at Rs 443-453 per share.
On November 30, the company had allotted 41 lakh equity shares at the upper price band of Rs 453 to 14 anchor investors and mopped up Rs 186 crore.
On the basis of revenues, Tega Industries is the second-largest global producer of polymer-based mill liners as of June 30. Mill liners are part of recurring consumables in global mineral beneficiation, mining, and bulk solids handling industry. Around 75 percent of the demand for mill liners came from copper and gold mining in 2020, while the rest came from iron ore, cement and other aggregates.
Experts are confident about the business model of the company as it makes specialised critical products with high barriers to replacement or substitution. Its business is insulated from the mining capex cycles of the customers as it caters to after-market spends generating recurring revenues. The repeat orders of spares are pegged at typically three times the upfront capex spend over the lifecycle of a mill.
They expressed that strong response to NII and QIB portion coupled with positive market sentiment and attractive valuation will help the company make a strong listing in the stock market on its listing day.
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