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Shares of Chennai-based Data Patterns (India) will be listed at the bourses on Friday. The IPO of the vertically integrated defence and aerospace electronics solutions provider catering to the indigenously developed defence products industry witnessed a strong response from all category investors and subscribed nearly 120 times.
The company has fixed the IPO price at ₹585, with the upper end of the price band at ₹555–585. While the retail portion was subscribed 23.41 times, the quota for non-institutional and qualified institutional buyers had received bids 254.22 times and QIBs by 190.86 per cent.
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Analysts expect the stock to make a strong debut at the bourses, given the strong IPO subscription and investors interest in defence stocks. Aayush Agrawal, Senior Analyst, Swastika Investmart Ltd, said, “We believe Data Patterns has the potential to grow rapidly and exponentially as part of the ‘Make in India’ initiative.”
The company has experienced rapid growth in revenues and profits, with margins that are soaring. At an upper price band of ₹585, the IPO is priced at a PE ratio of 49x and a P/BV ratio of 13x to FY21 earnings, said Aayush Agrawal and added, “positive sentiment is likely to accompany the IPO and the company as a result of the defence sector’s attractiveness.”
Based on the GMP currently, according to him, one can expect a 35 per cent listing gain. Investors who got allotments should hold the stock while new investors can look for buying opportunities at any correction or consolidation, he added.
Issue details
The ₹588-crore IPO consists of a fresh issue of ₹240 crore. The company had raised ₹176 crore from anchor investors ahead of its initial share by allotting 30.16 lakh shares at ₹585 a share.
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The anchor book has seen strong participation from domestic mutual funds (HDFC MF, ICICI Pru MF, Axis MF, Kotak MF, Birla MF, Nippon MF, FT MF, Tata MF, PGIM MF and IIFL MF), life insurance companies (HDFC Life and Tata AIA Life) and other institutional investors (Nomura Funds, White Oak Capital and Enam).
The fresh issue money will be utilised for capital expenditure requirements, and repaying of debts.
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