Tega Industries is all set to open its initial public offering (IPO) on Wednesday, December 1. It is a leading manufacturer and distributor of specialised and ‘critical to operate’ and recurring consumable products for the global mineral beneficiation, mining and bulk solids handling industry.
Tega Industries IPO Price, Date, Key Details
Tega Industries has fixed the price band at Rs 443-453 per share for its maiden issue. Tega Industries IPO will be open for subscription from December 1-3.
Tega Industries IPO is an entirely Offer for Sale (OFS) of 1,36,69,478 equity shares by selling to shareholders and promoters. At upper price of Rs 453 per share, the offer could raise up to Rs 619.22 crore. As this issue is completely an Offer for Sale, the Kolkata-based manufacturing company will not directly receive any proceeds from the IPO.
Promoters Madan Mohan Mohanka and Manish Mohanka will sell 33,14,657 equity shares and 6,62,931 equity shares, respectively. Investor Wagner would offload 96,91,890 equity shares through offer for sale (OFS).
Tega Industries IPO Lot Size:
Investors can bid for a minimum of 33 equity shares and in multiples of 33 shares thereafter. Retail investors can make a minimum investment of Rs 14,949 per lot and their maximum investment would be Rs 1,94,337 for 13 lots.
Tega Industries IPO Objective:
The objective of the offer is to achieve the benefits of listing the equity shares on the stock exchanges. The company expects that listing of the equity shares will enhance its visibility and brand and provide liquidity to its existing shareholders, said Kotak Securities.
Tega Industries IPO: Company Strength
Tega Industries is a leading producer of specialised products, with high barriers to replacement or substitution. It is also the second-largest producer of polymer-based mill liners globally. It is a well-recognised brand with experienced promoters. The company has high value add and technology intensive products, backed by strong R&D and focus on quality control.
Tega Industries has six manufacturing sites including three in India — Dahej
in Gujarat, Samali and Kalyani in West Bengal, and the other three sites are
in major mining hubs of Chile, South Africa and Australia. It has long standing market player with marquee global customer base and strong global manufacturing and sales capabilities. The well-established geographically diversified pan-India distribution presence is one of the biggest strength of Tega Industries Limited.
Tega Industries IPO: Company Financials
Tega Industries posted a whopping 108 per cent jump in net profit to Rs 136.41 crore in FY21. The net profit stood at Rs 65.5 crore in FY20 and Rs 32.67 crore in FY21. The company a net profit of Rs 11.88 crore on a turnover of Rs 179.39 crore for the first quarter of FY22 ended on June 30, 2021. The consolidated revenue increased 23 per cent year-on-year to Rs 856.68 crore in FY21. The revenue was at Rs 695.54 crore in FY20. Consolidated revenues for FY 19 came in at Rs 643.01 crore.
Tega Industries IPO Key Risks:
The company is dependent on third party logistic and support service providers for the delivery of raw materials and finished products and any disruptions in their services including transportation services or a decrease in the quality of their services may adversely affect business, financial condition and results of operation. It has global manufacturing facilities, sales and operations exposing it to the risks of doing business in foreign countries. Having a handful of key suppliers of certain raw materials can also be an issue in the long run, according to analysts.
Tega Industries shares grey market premium surged to Rs 370 on December 1.
Tega Industries IPO: Should you Subscribe?
“We believe that the company is well placed across the value chain of a mineral processing as it provides a wide range of products and solutions which are critical at different stages of mineral processing. Further, its leadership position, strong R&D, track record of developing innovative product portfolio and marquee global customers are key positives for the company. In the long term, the company intends to gain market share and increase penetration globally in North America, South America, Australia and South Africa. Besides, it has plans to expand its manufacturing unit in Chile, grow product offerings and explore opportunities for inorganic growth. On a financial front, the company’s performance has been strong wherein revenue/PAT grew at a CAGR of 13 per cent/104 per cent between FY19-21 and the growth momentum is expected to continue going forward as well. From a long term perspective, we have a positive view on the company,” said Religare Broking in a note.
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