Tega Industries IPO kicks off to a good start; should you subscribe? Here is what experts, brokerages say

Tega Industries' initial public offer (IPO) has kicked off to a great start on Wednesday as the issue was fully subscribed around 11.15 am. Retail portion performed even better as the quota of shares resaved for this category was completely booked within minutes of opening of the issue.  

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Around 1.15 am, the initial public offer (IPO) of Tega Industries was subscribed 2.23 times on Day 1. The IPO received 2,13,27,636 bids already against 95,68,636 on offer on Wednesday.

The IPO saw massive interest from retail investors as the issue was booked over 400 per cent around the same time. The Retail Individual Investors (RIIs) subscribed to the issue 4.37 times with bidding of 53,35,077 shares as against 47,84,318 reserved stocks for this category.  
Meanwhile, here is what experts and brokerages say about this issue:

Proficient equities Private limited Founder and Director Manoj Dalmia

Saying the issue is an OFS, Proficient equities Private limited Founder and Director Manoj Dalmia has recommended subscribing to the IPO at the end of Day 3 (December 3) if anchor investors subscribe to the issue with good numbers.  

Ravi Singh, head of Research and vice president, share India
"There is significant scope for new mining capacities and considerable opportunities for future discoveries of sub-surface deposits of metals in India. India’s mineral production of most of the important minerals is also showing positive growth during 2021. Since Tega Industries deals in manufacturer of consumables concerning the mining industry, investors may include this IPO in their portfolio for long-term gains," said Ravi Singh, head of Research and vice president, share India.

Aayush Agrawal, senior analyst, Swastika Investmart Ltd
Aayush Agrawal, senior analyst, Swastika Investmart Ltd, said the company has posted stable growth in revenue in the last three years. " The revenue has grown from Rs 643 crore to Rs 856.68 crore over the period of FY19 to FY21. During the same period, profit grew from Rs 32.67 crore to Rs 136.4 crore," said the analyst.  
The Kolkata-based Tega Industries IPO is purely an offer of sale of 1,36,69,478 equity shares, hence no amount will be used for the company's growth, highlighted the analyst. "The company has a sufficient cash balance where the PE fund is exiting. The IPO is arriving at a PE of 22x to its EPS of Rs 20.48 for FY21. The valuation of the company seems to be attractively priced for the investors. Thus, we assign a "SUBSCRIBE" rating for listing gain and long term," he added.

ICICI Direct Research

ICICI Direct Research also assigned subscribe rating for this IPO. " Tega’s strong market position, innovative products, and higher entry barriers likely to help maintain its margins while consistent growth with high repeat business (~74%) would augur well in the long run," it noted in its report.

Choice Broking
Highlighting strong fundamentals, operation in the niche segment, Choice Broking also suggested to subscribe the issue.  
 

Anil Singhvi
Ahead of the opening of the IPO for public subscription, Zee Business Managing Editor Anil Singhvi has also recommended applying for this issue for big listing gain and for the long-term.  
Strong growth and financial track record, experienced promoters, and attractive valuations are big positives for the company, said Zee Business Managing Editor. He said, however, risk due to global presence and the very small size of the company are some negative aspects.   

About the IPO 
Earlier on Wednesday, the three-day initial public offer opened this morning with massive traction from investors. The issue will conclude on December 3. Tega Industries IPO has fixed a price band of Rs 443-453 a share for its Rs 619-crore initial share-sale.  Investors can bid for a minimum of 33 equity shares and in multiples thereof.  
Meanwhile, Tega Industries has reserved half of the issue size for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and 35 per cent for retail investors.    

Tega Industries IPO full timeline    
Application start date: December 1, 2021    
Application end date: December 3, 2021    
Allotment beginning date: December 8, 2021    
Refund initiation date: December 9, 2021    
Allotment date: December 10, 2021    
Listing Date: December 13, 2021

About the company  
The Kolkata-based manufacturer of consumables for the mining industry will see the shares of the company listed on both BSE and NSE.  Tega Industries offers comprehensive solutions to marquee global clients in the mineral beneficiation, mining and bulk solids handling industry, through its wide product portfolio.