Ahmedabad-based Mamata Machinery, a manufacturer and exporter of packaging and extrusion equipment, has launched its IPO to raise ₹179.39 crore. The price band is set at ₹230-243 per share, and investors can apply for a minimum of 61 shares or in multiples thereof. The IPO will remain open for subscription from December 19 to December 23, with shares expected to list on both BSE and NSE by December 27.
Key Details
- Nature of the IPO: Entirely Offer for Sale (OFS) of 73,82,340 shares by promoters.
- Industry Focus: Packaging solutions for FMCG, food & beverage industries.
- Valuation Metrics:
- Price-to-Earnings (P/E) ratio of 16.6x at the upper price band.
- Market cap post-issue: ₹597.9 crore.
- Return on Net Worth (RoNW): 27.4% (FY24).
- Financial Performance (Q1 FY24):
- Net profit: ₹2.18 crore.
- Revenue: ₹27.62 crore.
Strengths
- Global Presence and Exports:
Mamata Machinery has exported machines to over 75 countries and maintains international offices in the US. Its presence in Europe, Africa, and the Middle East positions it as a global player. - Technological Leadership:
The company holds four patents and focuses on innovation to cater to diverse markets. - Stable Financials:
Consistent profitability, improving margins, and a strong RoNW make it attractive to investors. - Valuation:
Analysts consider the IPO fairly priced compared to peers, offering potential for growth. - Expanding Demand for Packaging:
Rising global demand for packaging solutions, especially in FMCG and food industries, aligns with Mamata Machinery’s business focus.
Risks
- Seasonality and Competition:
The packaging industry is cyclical and faces stiff competition from established players globally. - Reliance on Non-Recyclable Polymers:
Environmental concerns and regulations around non-recyclable materials could impact operations. - Complete OFS:
The IPO proceeds will not directly benefit the company but will be paid to the promoters.
Analyst Recommendations
Anand Rathi Research:
Recommends ‘subscribe’ for long-term gains due to sound financials, valuation, and strategic expansion into key regions.
Choice Broking:
Sees strong growth potential in Europe, Africa, and the Middle East. Highlights the fair valuation at 16.6x P/E and advises ‘subscribe’ for long-term wealth creation.
Canara Bank Securities:
Cites Mamata Machinery’s patents, robust financials, and export-oriented operations as competitive advantages. Assigns a ‘subscribe for long-term’ rating.
IPO Insights
| Parameter | Details |
|---|---|
| IPO Size | ₹179.39 crore |
| Price Band | ₹230-243 per share |
| Minimum Lot Size | 61 shares |
| Reservation | QIB: 50%, NII: 15%, Retail: 35% |
| Listing Date | December 27, 2024 |
| Lead Manager | Beeline Capital Advisors |
| Registrar | Link Intime India |
Should You Apply?
The Mamata Machinery IPO presents a promising opportunity for long-term investors. The company’s strong technological edge, global presence, and favorable valuation make it a compelling choice. However, the cyclical nature of the packaging industry and the OFS structure pose some risks.
If you have a long-term investment horizon and seek exposure to a growth-oriented company in the packaging sector, subscribing to this IPO could be a strategic decision.
FAQs
1. What is the price band for Mamata Machinery IPO?
The price band is set at ₹230-243 per share.
2. What is the minimum investment required?
Investors need to apply for a minimum of 61 shares, which amounts to approximately ₹14,023 at the upper price band.
3. Is this IPO suitable for short-term investors?
The IPO is more suited for long-term investors due to the nature of the industry and the company’s growth potential.
4. What are the risks associated with this IPO?
Key risks include seasonality in demand, global competition, and reliance on non-recyclable polymers.
5. How does Mamata Machinery compare to its peers?
At a P/E ratio of 16.6x, the IPO is considered fairly priced and competitive compared to industry peers.
6. Where does Mamata Machinery export its products?
The company exports to over 75 countries, with offices in the US and sales agents across Europe, Africa, and Asia.
7. When will the shares be listed?
The shares are expected to be listed on December 27, 2024, on both BSE and NSE.
8. What is the nature of this IPO?
The IPO is entirely an Offer for Sale (OFS), meaning the proceeds will go to the promoters.
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