Chennai-based Data Patterns (India) Limited, a specialist in defence and aerospace electronics system, plans to open the bid/offer period to its IPO on December 14 and close on December 16.

The offer’s price band has been fixed at ₹555–585 per equity share. This implies a market cap of ₹3,035 crore at the top end of the price band.

The issue size is ₹588 crore at the upper end of the price band, of which ₹240 crore is fresh issue and ₹348 crore is offer for sale (OFS).

Florintree-backed Data Patterns — which developed a fire control system for Brahmos and the launch pad countdown system — has undertaken a pre-IPO placement of 10,39,861 equity shares aggregating up to ₹60 crore.

Book-building process

The offer is being made through the book-building process wherein not more than 50 per cent of the offer shall be available for allocation to qualified institutional buyers, not less than 15 per cent for allocation on a proportionate basis to non-institutional investors, and not less than 35 per cent for allocation to retail individual bidders, said a company press release.

Data Patterns will utilise net proceeds from the fresh issue to the extent of ₹60.80 crore for prepayment and repayment of certain outstanding borrowings, ₹95.19 crore for working capital requirements, and ₹59.84 crore for upgrading and expanding its existing facilities at Chennai and general corporate purposes, S Rangarajan, CMD, Data Patterns, told newspersons in a virtual press met.

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The company is doubling the available floor area, building capacity to handle large and heavy equipment and integration of large radars and mobile EW system, satellite integration facility.

“Our order book is worth nearly ₹600 crore as of September 2021,” Rangarajan said.

‘Make in India’ opportunities

Data Patterns had a net profitability growth of approximately 164 per cent between FY20 and FY21. In its 35 years, it has designed and developed defence and aerospace electronics in areas like avionics, radars, electronic warfare, missile electronics and satellite or launch vehicle, he said.

The company will leverage the ‘Make in India’ initiative and bid for larger and more complicated tenders. Data Patterns will also focus on repeating large volume production orders, augment design and development capabilities, and focus on exports with global defence spending in 2020 pegged at $1,981 billion. Under Make in India, the fund available to defence industry participants from FY22 to FY31 is estimated at $339 billion, he said.