TechEra Engineering Ltd, an emerging player in the aerospace and defense industry, has opened its Initial Public Offering (IPO) for subscription starting from September 25, 2024.
With a fresh issue of 43.78 lakh shares aggregating to ₹35.9 crore, the IPO is garnering attention from investors keen on gaining exposure to the precision tooling market. The subscription window is open for three days and will close on September 27, 2024.
This article breaks down everything you need to know about TechEra Engineering’s IPO, including its price band, grey market premium (GMP), offer size, and more.
Key Details of TechEra Engineering IPO
The TechEra Engineering IPO is a fresh issue of 43.78 lakh shares, with no offer-for-sale (OFS) component. Here are the key details:
- IPO Subscription Period: September 25 – September 27, 2024
- Price Band: ₹75 to ₹82 per share
- Lot Size: 1,600 shares (minimum investment of ₹1,31,200)
- Offer Size: ₹35.9 crore
Market Segmentation for Investors
The company has strategically segmented its offer size to accommodate various investor categories:
- Qualified Institutional Buyers (QIBs): 50% reserved
- Non-Institutional Investors (NIIs): 15% reserved
- Retail Investors: 35% reserved
Retail investors have the opportunity to invest with a minimum lot size of 1,600 shares, making this an attractive IPO for those looking to gain exposure to the aerospace and defense tooling sector.
Grey Market Premium (GMP) and Expected Listing Price
As of September 25, 2024, TechEra Engineering’s shares are commanding a GMP of ₹20, which implies a potential listing price of around ₹102 per share. This represents a 24.39% gain over the upper price band of ₹82. Although GMP is not an official price indicator, it often reflects investor sentiment in the days leading up to the listing.
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TechEra Engineering: Company Overview
Founded in 2018, TechEra Engineering Ltd. specializes in the design, manufacturing, and supply of precision tooling and components for the aerospace and defense industries. With a rapidly growing reputation for delivering high-quality products, the company’s offerings include:
- Assembly Tools
- Jigs
- Fixtures
- Maintenance and Repair Tools
TechEra Engineering’s client base includes major defense contractors and aerospace manufacturers, positioning the company for long-term growth in a niche but vital sector.
Financial Performance
In FY24, TechEra Engineering showcased significant growth in its financials:
- Revenue: Increased by 46.93%, reaching ₹39.07 crore, compared to ₹26.59 crore in FY23.
- Profit After Tax (PAT): Witnessed an impressive jump of 315.67%, rising to ₹5.57 crore in FY24 from ₹1.34 crore in the previous year.
These strong financials highlight the company’s ability to scale its operations effectively, making it a promising opportunity for potential investors.
Use of IPO Proceeds
TechEra Engineering intends to utilize the IPO proceeds for:
- Purchasing New Machinery: Expanding the company’s production capabilities to meet growing demand.
- Working Capital Requirements: Ensuring sufficient liquidity for day-to-day operations and expansion plans.
- Debt Repayment: The company plans to pay off some of its outstanding borrowings to improve its balance sheet.
- General Corporate Purposes: Covering administrative and operational expenses as the company scales further.
This strategic allocation of funds reflects TechEra Engineering’s focus on enhancing its manufacturing capabilities while maintaining financial stability.
Allotment and Listing Dates
- IPO Allotment Finalization: September 30, 2024
- Refund Initiation: October 1, 2024
- Demat Credit of Shares: October 1, 2024
- Listing Date on NSE SME (Emerge): October 3, 2024
Investors should be aware that Kfin Technologies Ltd is the official registrar for the IPO, and SKI Capital Services Ltd serves as the book-running lead manager.
Should You Apply for TechEra Engineering’s IPO?
TechEra Engineering is emerging as a key player in a niche industry with high barriers to entry. The company’s strong financial growth, strategic expansion plans, and rising market demand for precision aerospace components make it an attractive proposition for investors.
However, investors should be mindful of market risks and perform due diligence before applying.
Why Consider TechEra Engineering IPO?
- Strong revenue and profit growth in FY24.
- Increasing demand for precision tooling in aerospace and defense sectors.
- Solid backing from experienced professionals and a proven business model.
Conclusion
TechEra Engineering’s IPO provides a unique opportunity to invest in an industry poised for growth. With a favorable GMP, a strategic business model, and strong financial performance, this IPO could yield attractive returns for both retail and institutional investors.
As always, potential investors should carefully assess the company’s financials and market trends before making their decision.
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Disclaimer
This article is for informational purposes only and does not constitute financial or investment advice. Always do your own research before making any investment decisions. The author and publisher do not hold any responsibility for financial losses or gains incurred from using this information. Past performance does not guarantee future results.