Paras Defence IPO - 7 things to know
Paras Defence and Space Technologies IPO will open for subscription on 21st September and close on 23rd September. Here are seven things to know about the Paras Defence IPO.
1) It is engaged in the design, development, production and testing of defence and space engineering products and also solutions. It caters to most of the large defence companies and government sponsored defence research organizations in India.
2) Paras operates across 5 major product lines viz. Defence optics, Defence electronics, Heavy Engineering, Niche technologies and Electromagnetic pulse protection systems. It almost has a monopoly in the space optics field, which is a kind of an entry barrier.
3) Paras is among the defence technology companies to largely benefit from the Make in India campaign which proposes to shift production of most of the regular defence purchases to the domestic manufacturers from a strategic standpoint.
4) The company is profit making and in the year ended Mar-21, Paras reported net profits of Rs.15.79 crore on net sales of Rs.144.61 crore giving a net margin of 10.92%. The company needs to look at improving asset turnover ratios due to front-ending of costs.
5) The IPO will be a combination of a fresh issue of Rs.140.60 crore plus an offer for sale of 17.245 lakh shares. The price band for the stock is yet to be decided. Paras is also planning an anchor placement ahead of the IPO issue.
6) The company proposes to finalize the basis of allotment for the IPO by 28th September and the shares will be listed on the stock exchanges on the 01st October. Promoters are holding 88.16% prior to the IPO and this is likely to get diluted post the issue.
7) The proceeds of the fresh issue will be used for capacity expansion as well as for repaying part of the debt in the books of the company. Anand Rathi is the lead manager to the issue while Link Intime will be the registrar to the issue.
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