The initial public offer (IPO) of Data Patterns, a supplier of electronic systems to the defence and aerospace sector, will open for subscription on Tuesday, December 14, 2021. The company has fixed a price band of Rs 555-585 per share for its three-day IPO that will conclude on December 16.  

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Data Patterns IPO comprises a fresh issue of shares worth Rs 240 crore and an offer for sale (OFS) of 59.52 lakh equity shares by promoters and individual selling shareholders. The company is expected to fetch Rs 588.22 crore at the upper end of the price band.  

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Meanwhile, as the issue opens for subscription on Tuesday, Marwadi Shares and Finance Limited has assigned a 'subscribe with caution' rating to the IPO.  

It said considering the Sept-21 TTM EPS of Rs.16.41 on a post-issue basis, the company is going to list at a P/E of 35.64x with a market cap of Rs.30,354 mn, while its peers namely Paras Defence & Space Technologies & MTAR Technologies are trading at a P/E of 191x & 130x respectively.  

"We assign a “Subscribe” (With Caution) rating to this IPO as the company is one of the fastest-growing companies in the Defence and Aerospace Electronics sector. However, significant working capital requirements, client concentration, and promoter pledging keep us cautious from a long-term perspective, " said Marwadi shares and Finance Limited.  

Data Patterns Ltd is among the few vertically integrated defence and aerospace electronics solutions provider catering to the indigenously developed defence products industry.

Founded by Srinivasagopalan Rangarajan and Rekha Murthy Rangarajan, Data Patterns is a vertically integrated defence and aerospace electronics solutions provider that caters to requirements across space, air, land and the sea. The company caters to the entire spectrum of defence and aerospace platforms –space, air, land and sea and has end-to-end capabilities to build and deliver complete systems, with their design and manufacturing capabilities being completely in-house.

As per the company's DRHP, proceeds from the fresh issue will be used for repayment of debt, funding its working capital and upgradation and expansion of its existing facilities besides general corporate purposes.