The ₹179.39 crore Initial Public Offering (IPO) of Mamata Machinery begins today, Thursday, December 19, and will remain open for bidding until Monday, December 23. The company is offering its shares at a price range of ₹230-243 each, with a minimum application of 61 equity shares and in multiples thereafter.
Company Overview
Established in April 1979, Ahmedabad-based Mamata Machinery specializes in manufacturing and exporting plastic bag and pouch-making machines, packaging, and extrusion equipment. It serves industries such as FMCG and food & beverages, offering innovative solutions in the packaging sector.
Analyst Opinions
Most analysts have a positive outlook on the IPO, recommending it for long-term investors due to its solid financial track record, reasonable valuations, growing demand for packaging solutions, R&D strength, and expansion plans. However, potential risks include seasonality, stiff competition, and the IPO’s structure being entirely an Offer-for-Sale (OFS).
Valuation and Growth Potential
At the upper price band, the company’s P/E ratio stands at 16.6x, with a post-issue market cap of ₹597.9 crore and a return on net worth (RoNW) of 27.4% for FY24. Analysts believe the valuation is competitive compared to peers, with the company showing consistent growth in domestic and international markets.
Global Presence
Mamata Machinery has exported its products to over 75 countries, with offices in the U.S. and sales agents across Europe, South Africa, and Asia. Its manufacturing facilities are located in India and the USA.
Key Customers
The company’s clientele includes well-known names like Balaji Wafers, Dass Polymers, Sunrise Packaging, Om Flex India, Chitale Foods, and Emirates National Factory for Plastic Ind LLC, among others.
Challenges
While the company faces challenges such as global competition, reliance on non-recyclable polymers, and business seasonality, its focus on recyclable packaging and expansion into regions like the Middle East and Africa could drive future growth.
Financial Performance
Mamata Machinery reported a net profit of ₹2.18 crore on revenues of ₹27.62 crore for the quarter ending June 30, 2024. Analysts highlight its strong financial performance and promising growth potential.
IPO Details
- 50% reserved for Qualified Institutional Buyers (QIBs)
- 15% for Non-Institutional Investors (NIIs)
- 35% for retail investors
- Shares will list on BSE and NSE, with a tentative debut date of Friday, December 27.
Final Recommendation
Brokerages like Anand Rathi Research, Choice Broking, and Canara Bank Securities suggest subscribing to the IPO for its long-term growth prospects, robust financials, and competitive positioning in the packaging sector.
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