Packaging machinery manufacturer Mamata Machinery Ltd. is set to debut on bourses on Friday, December 27, after its initial public offering was subscribed close to almost 200 times the third and final day of bidding.
The retail investor category was booked 138.08 times, while the qualified institutional buyers (QIB) segment was subscribed 235.88 times. The non-institutional investors (NII) category witnessed the highest interest, with a subscription of 274.38 times.
With the latest grey market premium (GMP), Mamata Machinery’s IPO is expected to deliver substantial returns to investors.
As of Thursday afternoon, the GMP was recorded at ₹255, indicating a potential 105% premium over the issue price of ₹243 per share. If this trend holds, Mamata Machinery could see its shares debut at approximately ₹498 on the stock exchanges.
Prashanth Tapse of Mehta Equities believes the demand was on the back of reasonable valuations keeping good listing gains on table for new investors.
“Considering market sentiments and massive subscription demand, we expect the company can list with strong listing gain over with high probability of delivering nearly 100% return on its issue price,” Tapse said.
Prathamesh Masdekar of StoxBox, who expects a premium of 107% on debut, said the company strategically focuses on strengthening relationships with existing customers and expanding its product offerings across geographies to drive growth.
Masdekar said the company plans to win new customers and explore emerging opportunities within its product categories by developing products aligned with customer needs. Currently focused on food packaging, diversification will be advantageous in other FMCG sectors. Additionally, the company plans to capitalise on regulatory changes, such as restrictions on single-use plastics, by offering suitable alternatives.
The Gujarat-based company sold its shares in a fixed price range of ₹230-243 apiece. The IPO was entirely an offer-for-sale (OFS) of 73.82 lakh equity shares, by promoters, worth ₹179.38 crore.
Since it’s an OFS, the company will not receive any proceeds from the public issue, and the entire fund will go to the selling shareholders.
The company stated that the objective of the initial share sale is to gain the advantages of listing the equity shares on the stock exchanges.
Additionally, the company anticipates that listing the equity shares will boost its visibility and brand image, provide liquidity to its shareholders, and establish a public market for the equity shares.
At the upper end of the price band, the company’s market capitalisation has been pegged at close to ₹600 crore.
Incorporated in 1979, Mamata Machinery Ltd manufactures and exports plastic bags and pouch making machines, packaging machines and extrusion equipment. It provides end-to-end manufacturing solutions for the packaging industry. Products manufactured using its machines are used across several industries as packaging applications, such as the packing of food and FMCG products.
It primarily sells packaging machinery to direct consumer brands catering to the FMCG, Food, & Beverage Industry and bag and pouch making machines to convertors and service providers who, in turn, mainly catering the FMCG and consumer industry. MML’s machineries are also utilized in non-packaging applications, such as e-commerce bags and garment packaging bags.
In FY24, Mamata’s revenue from operations surged to ₹237 crore from ₹201 crore a year ago. The profit after tax in the same period rose to ₹36.1 crore.
Content retrieved from: https://www.cnbctv18.com/market/mamata-machinery-ipo-listing-to-double-investors-wealth-here-is-what-gmp-suggests-19529999.htm.
