Tega Industries is aiming to generate funds through a public offering that is entirely an Offer for Sale (OFS) by existing shareholders in the Rs 443-453 per share price range.
The subscription period for Tega Industries’ Rs 620 crore initial public offering (IPO) has begun. The company is attempting to raise funds through an initial public offering (IPO) that is fully an Offer for Sale (OFS) by current shareholders at a price range of Rs 443-453 per share. Tega Industries is a global manufacturer and distributor of recurring consumables and ‘necessary to operate’ components for the mineral beneficiation, mining, and bulk solids handling industries. The subscription period for Tega Industries’ initial public offering (IPO) will end on December 3rd.
Prior to the IPO, the company raised Rs 185.7 crore from 25 anchor investors. Some of the notable names include SBI Mutual Fund, Goldman Sachs, ICICI Prudential, HDFC Trustee Company, Axis Mutual Fund, and BNP Paribas. Anchor investors received 41 lakh shares at the top of the pricing band of Rs 453 per share. Tega Industries shares were trading with a premium of Rs 400 per share in the grey market, according to people dealing in unlisted shares. On the grey market, the stock’s gains from earlier this week have been extended.
Because it is just a public offering for sale, Tega Industries will not get any funds from the IPO. “It is priced at 22x P/E for FY21 at the upper end of the pricing band,” according to ICICI Direct analysts. According to the brokerage firm, Tega’s strong market position, innovative items, and higher entry barriers are likely to help the company maintain its profits, while consistent growth and high repeat business (74 percent) bode well in the long run. On ICICI Direct, the issue gets a ‘Subscribe’ rating. The issue is being offered at fair valuations, according to Marwadi Financial Services, which also placed a’subscribe’ tag to it.
Tega Industries is the second-largest producer of polymer-based mill liners in the world. In addition, its product portfolio includes approximately 55 mineral processing and material handling products. “We believe the company is well positioned across the mineral processing value chain,” Religare Broking said, “since it offers a varied range of goods and solutions that are critical at various phases of the process.” The brokerage business also expressed confidence in the company’s long-term prospects.
Is it a bad thing to be reliant on international markets?
Tega Industries earns more than 85% of its revenue outside of India. The firm intends to increase market share and penetration in North America, South America, Australia, and South Africa. According to Religare Broking, “it also has intentions to expand its production facilities in Chile, boost product offerings, and study inorganic development potential.” The high reliance on international markets, according to ICICI Direct, is a risk. “Because 85 percent of Tega’s revenue comes from outside India,” they explained, “they are exposed to the dangers of doing business in other countries, which could impair their business, financial condition, and operating results.”
Qualified institutional buyers will receive 50% of the offering, followed by retail investors who will receive 35% and non-institutional buyers who will receive 15%. After the IPO, the promoter group’s shares will drop from 85.17 percent to 79.17 percent. On the other hand, public shareholding will increase from 14.83 percent to 20.83 percent.