Tega Industries’ Rs 619-crore initial public offering continues to see healthy demand, with the issue being subscribed 13.87 times on December 2, the second day of bidding. Investors have bid for 13.26 crore shares against an IPO size of 95.68 lakh equity shares.
Retail and non-institutional investors provided strong support to the issue as portion set aside for them were subscribed 17.04 times and 20.48 times, respectively. Qualified institutional investors bought shares 3.35 times the allotted share quota.
The IPO is completely an offer-for-sale of up to 13,669,478 equity shares by promoters and shareholders, hence the company will not receive any issue proceeds. The price band for the offer is Rs 443-453 a share.
Tega Industries 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. Globally, it is the second-largest producer of polymer-based mill-liners on the basis of revenues as of June 2021.
Also read: Tega Industries IPO: Should you subscribe to it?
“The company is bringing the issue at a price band of Rs 443-453 per share at a price-to-earnings (P/E) multiple of 22 on post issue FY21 EPS. The company, being a leading producer of specialised and critical-to-operate products with high barriers to replacement or substitution is insulated from mining capex cycles, as its products cater to after-market spends, providing recurring revenues,” said Hem Securities.
The company has high value-add and technology-intensive products, backed by strong R&D and focus on quality control. “It is a long-standing market player with marquee global customer base and strong global manufacturing and sales capabilities,” said the brokerage. The company with consistent growth characterised by operational efficiency and high repeat business has an experienced management team supported by large, diverse and skilled work force, it said.
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Hem Securities recommends subscribing the issue for both listing gain and long-term purpose.
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