Mamata Machinery IPO Day 1: Latest GMP, subscription status to review. Apply or not?

Mamata Machinery IPO: Mamata Machinery Ltd, a manufacturer of packaging machinery, will open its initial public offering for public subscription from December 19 to 23, priced between ₹230 and ₹243 per share. The company, based in Gujarat, has secured over ₹53 crore from anchor investors prior to its IPO.

As per a notice posted on BSE’s website, Mamata Machinery has distributed 22.04 lakh shares to seven investment funds at a price of ₹243 each, resulting in a total transaction value of ₹53.56 crore.

At the upper end of the price range, the company’s market capitalization has been set at nearly ₹600 crore. Mamata Machinery delivers complete manufacturing solutions for the packaging sector. The company markets its machines under the brands ‘Vega’ and ‘Win.’ It provides an extensive array of products that cater to the entire value chain of the flexible packaging market.

Half of the offering has been allocated for qualified institutional buyers, with 35 percent for retail investors and the remaining 15 percent designated for non-institutional buyers.

Mamata Machinery IPO Subscription Status

The initial public offer of Mamata Machinery IPO has been subscribed 5.65 times on the first day of subscription today, at 12:06 IST, as per BSE data.

The initial share sale received bid for 2,92,60,236 shares against 51,78,227 shares on offer, according to BSE.

The portion for retail investors received 8.97 times subscription while the quota for non-institutional investors got subscribed 5.23 times. The qualified institutional buyers (QIBs) part is booked 1%. The employee portion is subscribed 12.42 times.

Mamata Machinery IPO Review

Choice Equity Broking Pvt Ltd

The brokerage reports that at the higher end of its price range, Mamata Machinery is seeking a P/E multiple of 16.6x, based on its earnings of Rs. 14.7 and an EV/Sales multiple of 2.6x; this valuation appears to be at a discount when compared to its competitors.

Over the years, the company has demonstrated consistent performance, with an increasing number of machines sold both domestically and globally, contributing to a steady rise in margins. Looking forward, the brokerage anticipates that Mamata Machinery has significant long-term growth potential by expanding its reach into markets such as Europe, Africa, and the Middle East, which would further broaden its customer base. Therefore, the brokerage has issued a “SUBSCRIBE” recommendation for this offering.

Bajaj Broking

The brokerage indicated that the company occupies a unique position in the production of innovative plastic bags and pouch-making machinery, as well as packaging machines and extrusion equipment. It operates on a global scale and has a manufacturing facility in the US to cater to neighboring markets. The company has consistently demonstrated steady growth in both its revenues and profits from FY22 to FY24.

Although the initial period of Q1-FY25 seems to suggest high costs, historically, the first half has been a slower season for them. They typically perform better in the second half of the fiscal year. The management expresses confidence in sustaining the growth patterns exhibited. When looking at the earnings for FY24, the issue seems to be fairly valued. Investors might consider allocating funds for a medium to long-term investment.

Mamata Machinery IPO Details

The IPO is entirely composed of an offer for sale (OFS) that features up to 7.38 million shares from both promoters and existing shareholders. If set at the highest price point, the overall value of the offering will amount to ₹179.39 crore. Among the promoters of the company are Mahendra Patel, Chandrakant Patel, Nayana Patel, Bhagvati Patel, in addition to Mamata Group Corporate Services.

The aim of the offer is to enable the Offer for Sale (OFS) of 7,382,340 equity shares by the selling shareholders and to benefit from the listing of these equity shares on the Stock Exchanges.

Beeline Capital Advisors Pvt Ltd is the book running lead manager for the Mamata Machinery IPO, while Link Intime India Private Ltd serves as the registrar for this offering.

Mamata Machinery IPO GMP today

Mamata Machinery IPO grey market premium is +170. This indicates Mamata Machinery share price were trading at a premium of ₹170 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Mamata Machinery share price was indicated at ₹413 apiece, which is 69.96% higher than the IPO price of ₹243.

Based on the grey market activities observed over the past six sessions, the IPO GMP shows an upward trend today, indicating a robust listing. The minimum GMP recorded is ₹75, while the maximum is ₹170, as per experts from investorgain.com.

‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.