Paras Defence files papers for IPO

Mumbai-based Paras Defence and Space Technologies Ltd, a firm catering to the Indian defence sector, has filed the Draft Red Herring Prospectus (DRHP) with market regulator SEBI for an initial public offering (IPO).

The IPO will comprise fresh issuance worth ₹120 crore and an offer-for-sale of up to 17.24 lakh shares by promoters. The company may consider raising up to ₹35 crore through a pre-IPO placement, according to the DRHP.

The company intends to use the proceeds from the fresh issue to purchase machinery and equipment, funding incremental working capital requirements, repaying of certain borrowings and for general corporate purposes.

Of the total shares on offer, up to 50 per cent is reserved for qualified institutional buyers, 15 per cent for non-institutional investors and the remaining 35 per cent for retail investors.

Anand Rathi Advisors Ltd is the book-running lead manager to the issue.

Paras Defence is an indigenously designed, developed and manufactured (IDDM) company, primarily engaged in designing, developing, manufacturing and testing of defence and space engineering products.

The company’s consolidated net profit stood at ₹19.66 crore, ₹18.97 crore and ₹25.08 crore for the fiscal years ended March 31, 2020, 2019 and 2018, respectively. Its total income stood at ₹37.94 crore for the six-month period ended September 30, 2020, and ₹149.05 crore, ₹1,57.16 crore and ₹152.53 crore for the fiscal years ended March 31, 2020, 2019 and 2018, respectively.

It had recorded a net loss of ₹13.9 lakh for the six-month period ended September 30, 2020.

On the domestic front, Paras Defence’s customer base ranges from PSUs to various defence public sector undertakings such as Bharat Electronics Ltd, Bharat Dynamics Ltd and Hindustan Aeronautics Ltd. It has supplied products and solutions to private entities, including Tata Consultancy Services Ltd, and Alpha Design Technologies Ltd.

The firm has also catered to foreign customers such as Advanced 138 Mechanical and Optical Systems (Belgium), Chaban (Israel), Tae Young Optics Company Ltd (South Korea) and Green Optics (South Korea).