The initial public offering (IPO) of Paras Defense and Space Technologies was subscribed 9.55 times on September 21, the first day of the offer.
According to the subscription dates available on the stock exchanges until 1:30 p.m. IST, the offer received offers for 6,81,84,365 shares against the IPO size of over 71,40,793 shares.
The IPO includes the re-issue of shares valued at Rs.140.6 billion and an OFS offering of up to 17,24,490 shares by promoters and existing shareholders.
Those who sell shares in the OFS are promoters – Sharad Virji Shah, Munjal Sharad Shah and individual selling shareholders are – Munjal Shah, Shilpa Amit Mahajan and Amit Navin Mahajan.
According to a circular uploaded to the BSE website, the company has allocated 29,27,485 shares to anchor investors at Rs 175 each and valued the transaction at Rs 51.23 billion.
The proceeds of the new issue would be used to fund investment needs, meet additional working capital needs, and repay or prepay loans that the company draws.
Half of the issue volume is reserved for qualified institutional buyers (QIBs), 35 percent for private investors and the remaining 15 percent for non-institutional investors.
“We like PDSTL given its complex / broad product portfolio, its presence in niche defense areas, its strong customer relationships and its high barriers to entry. The issue is valued at 1.9 times the P / E ratio (peer average: ~ 2.4x) after the issue. That’s reasonable. We believe PDSTL could benefit from government stimulus for defense and space spending, so we recommend subscribing, “said Motilal Oswal.
“Given the adjusted EPS of Rs. 4.05 after issuing in FY21, the company will trade at a P / E of 43.23 with a market capitalization of Rs 682.5 billion. There are no public companies in India whose business portfolio is “is similar to the company’s business. We are giving this IPO a” Subscribe “rating because the company offers a wide range of products and solutions for both defense and aerospace applications and is well positioned to benefit from the” Atmanirbhar Bharat “to benefit the government. and Make in India initiatives.
“We believe that a strong order book, robust order pipeline, higher exports and higher contribution from higher margin businesses like defense optics would be beneficial to PDS in the long run. In terms of valuation, the FY21 price is ~ 31x P / E EPS (| 5.6 / share) in the upper price range, i.e. Rs 175, “said ICICI Direct.
The company is engaged in the development, development, manufacture and testing of a wide range of products and solutions for defense and space technology. Anand Rathi Advisors is the lead manager for this topic. The company’s equity interests would be listed on BSE and NSE.