InvestorQ : When is MTAR Technologies of Hyderabad coming out with its IPO and what is your view on the same?
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When is MTAR Technologies of Hyderabad coming out with its IPO and what is your view on the same?

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Rashi Mehra answered.
1 month ago
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You are absolutely right that Hyderabad based MTAR Technologies is planning to file for its IPO process shortly. MTAR is a precision engineering company and is backed by a former private equity head of Blackstone. MTAR develops and manufactures components and equipment for the defence, aerospace and nuclear energy sectors.

MTAR, by itself, is not a very new company because it was incorporated in 1970 and has been in existence for nearly half a century. MTAR is expected to file its draft red herring prospectus or DRHP in the forthcoming week. As per initial details available, the IPO will propose to raise Rs.650 crore and will be a mix of fresh issue of shares and an offer for sale.

It may be recollected that Cyriac had resigned from Blackstone in 2017 to start his own investment firm after spending over a 10 years with Blackstone. While Cyriac is backing MTAR, the company also boasts an impressive order book of around Rs.300 crore. This will increase to Rs.500 crore by the next year first half.

MTAR is currently in the process of setting up an additional facility at Adibatla in the state of Telangana and that facility is expected to become operational soon. MTAR currently operates out of 7 manufacturing facilities including an EOU.

The client list of MTAR reads like a “who is who” list. It includes Indian Space Research Organization or ISRO, Defence Research and Development Organization or DRDO, Nuclear Power Corporation of India or NPCIL, Bharat Dynamics, Hindustan Aeronautics etc. It also works with international clients like Bloom Energy Corporation of the US.

Interestingly, the order book of the company has swelled ever since the lockdown restrictions were eased. This has resulted in a slew of rating upgrades. ICRA has already upgraded MTAR technologies twice. In the process, it has taken its rating from BBB minus to BBB plus as on date.

For the fiscal year 2020, MTAR had reported revenues of Rs.214 crore and net profits of Rs.32 crore. This represents a growth over revenues of Rs.184 crore in the previous year for fiscal 2019. JM Financials and IIFL have been mandated as the advisors and lead managers to the MTAR issue.

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