The Hyderabad headquartered with decades of precision engineering capabilities and supplies to ISRO, NPCIL, BHEL, and HAL is looking to raise around Rs 600 crore from the IPO at a price band of Rs 574-575. The company also has long-standing relations with global multinationals such as Rafael, Elbit and Bloom Energy, among others.
The defence and space technologies firm will be issuing 1.03 crore shares comprising of a fresh issue of 21.5 lakh shares and 82.24 lakh shares of promoters and investors Fabmohur Advisors LLP and Solidus Advisors LLP, said a person in the know of developments.
“The company has already raised Rs 100 crore through a pre-IPO private placement of 18.51 lakh shares at a price of Rs 540 with three entities of SBI and three entities of Axis after a board’s resolution last Tuesday,” the person quoted above told ET.
MTAR, with over 50 years of manufacturing a wide range of mission-critical precision components and assemblies, supplied liquid propulsion engines for space vehicles such as Chandrayaan-II and Mangalyaan and engine used in the GSLV launch vehicle. “The company is looking to use Rs 63 crore to repay borrowings, Rs 95 crore towards working capital requirements and the balance towards general corporate purposes.”
The Hyderabad headquartered precision engineering solutions firm with seven modern manufacturing facilities including an export-oriented unit with over 400 machines capable of micro-level adherence is currently setting up facilities for roller screws, which are used as actuating mechanisms of aircrafts and missiles, said the person quoted above.
“MTAR Technologies will be the first manufacturer of precision engineering roller screws in India for nuclear, defence and space segments,” he said, adding that “MTAR is also planning to set up a specialized sheet metal fabrication facility for defence, aerospace and fuel cell sectors at Adibatla in Hyderabad outskirts to take off next fiscal.”
For the year ended March 2020, MTAR reported a post-tax profit of Rs 30 crore on a revenue of Rs 218 crore, with an industry high operating margin of 28.5% and a second highest net margin of 14%. Close to half of the revenues in the last fiscal accrued from contracts with customers located outside India.
MTAR, with operations in sectors with high entry barriers, currently has an order book of Rs 356.5 crore and is looking to “strengthen existing product portfolio and diversify into products with attractive growth and profitability prospects, enhance capabilities and grow value chains to supply critical and differentiated engineered products,” said the person quoted above.
The company is also looking to expand global operations and enhance its global presence in the sectors it is currently catering to. “Apart from looking at growth opportunities in support for Hydrogen based clean energy solution along with expansion plans of Bloom Energy outside of the US in South Korea, MTAR is also looking to enter into defence offset partnerships with certain global OEMs and has accordingly incorporated a subsidiary Magnatar Aero Systems.”
Further, the company is looking to capitalize on the upward trend of the nuclear sector in India, increasing indigenisation and policy initiatives in the defence sector, and commercialisation of the Indian space sector. “MTAR is looking to develop new relationships with customers, both in India and overseas, in a bid to capture lucrative opportunities in the nuclear, space and defence, and clean energy sectors,” said the person.
