Defence electronics firm Data Patterns files for IPO. Find out more

Defence electronics IPO
by 5paisa Research Team 22/09/2021

Data Patterns (India) Ltd, a Chennai-based supplier of electronic systems to defence and aerospace sectors, has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India to raise funds through an initial public offering (IPO). 

The IPO comprises a fresh issue of shares worth Rs 300 crore and an offer for sale of 60.7 lakh shares by promoter and individual selling shareholders. The OFS includes the sale of up to 19.7 lakh shares each by Srinivasagopalan Rangarajan and Rekha Murthy Rangarajan. Sudhir Nathan, GK Vasundhara and other existing shareholders will sell the remaining shares.

As per market sources, the overall IPO size is expected to be Rs 600-700 crore.

The company plans to use the net proceeds from the fresh issue to repay debt, fund its working capital, and upgrade and expand its existing facilities.

The defence electronics company may also consider a pre-IPO placement aggregating for up to Rs 60 crore. If it does so, it will reduce the amount from the fresh issue, according to the DRHP.

Data Patterns’ IPO comes close on the heels of another defence component supplier hitting the public markets with its IPO. Paras Defence and Space Technologies Ltd’s IPO opened Wednesday and has already been subscribed nearly 40 times with more than a day to go before the bidding closes.

Data Patterns’ business and financials

Data Patterns was founded by Srinivasagopalan Rangarajan and Rekha Murthy Rangarajan. The defence and aerospace electronics systems provider’s core competencies include design and development across electronic hardware, software, firmware, mechanical and product prototype, besides its testing, validation and verification. 

The company’s product portfolio ranges from building blocks to end systems. Its involvement has been found across radars, underwater electronics, communication and other systems, electronic warfare suites, avionics, small satellites, automated test equipment, and programmes catering to Tejas Light Combat Aircraft, the BrahMos missle and other communication and electronic intelligence systems.

Data Patterns had developed the first nano satellite, NiUSAT, which deployed in 2017. Two more satellites are in progress, the company said.

Data Patterns works closely with state-run defence companies such as Hindustan Aeronautics Ltd and Bharat Electronics Ltd as well as government organisations involved in defence and space research like the DRDO. 

The company’s order book has grown at a compound annual pace of 40.72% over the last four years. As on July 31, 2021, it had orders worth Rs 582.30 crore in hand.

For 2020-21, the company’s revenue from operations was at Rs 226.55 crore as against Rs 160.19 crore for the previous year. Net profit jumped to Rs 55.57 crore from Rs 21.05 crore.

Data Patterns is backed by Florintree Capital Partners LLP, an investment firm run by former Blackstone executive Matthew Cyriac. Florintree holds a 12.8% stake in the company.

IIFL Securities Ltd and JM Financial Ltd are the book running lead managers to the issue. 

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