Tega Industries’ initial public offering (IPO) begins today – see the issue price, GMP, analyst recommendation

Tega Industries is attempting to raise cash through a public offering that is wholly an Offer for Sale (OFS) by existing shareholders in a defined price band of Rs 443-453 per share.
Tega Industries’ Rs 620 crore initial public offering (IPO) is now open for subscription. The company is trying to generate capital through a public offering that is fully an Offer for Sale (OFS) by existing shareholders in a set price band of Rs 443-453 per share. Tega Industries manufactures and distributes specialist ‘essential to operate’ and recurring consumable items for the mineral beneficiation, mining, and bulk solids handling industries around the world. Tega Industries’ initial public offering (IPO) will close for subscriptions on December 3rd.

Tega Industries' initial public offering


The company has raised Rs 185.7 crore from 25 anchor investors ahead of the IPO. SBI Mutual Fund, Goldman Sachs, ICICI Prudential, HDFC Trustee Company, Axis Mutual Fund, and BNP Paribas are just a few of the big names. At the upper end of the pricing band of Rs 453 per share, anchor investors received 41 lakh shares. People dealing in unlisted shares stated Tega Industries shares were trading with a premium of Rs 400 per share in the grey market. The stock’s gains on the grey market from earlier this week have been extended.

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Tega Industries will not get any funds from the IPO because it is only a public offering for sale. “At the upper end of the price band, it is priced at 22x P/E for FY21,” according to ICICI Direct analysts. Tega’s strong market position, innovative goods, and increased entry barriers, according to the brokerage firm, are likely to help the company preserve its margins, while stable growth and high repeat business (74 percent) bode well in the long run. The issue has a ‘Subscribe’ rating on ICICI Direct. Marwadi Financial Services, which has similar views, stated that the issue is offered at fair valuations and added a’subscribe’ tag to it.

Tega Industries' initial public offering

Tega Industries is the world’s second largest manufacturer of polymer-based mill liners. Furthermore, they have over 55 mineral processing and material handling products in their product portfolio. “We believe the company is well positioned across the mineral processing value chain since it offers a diverse variety of goods and solutions that are crucial at various stages of the process,” said Religare Broking. The brokerage firm also stated that it has a long-term optimistic outlook for the company.

Is it a bad thing to be reliant on international markets?

Tega Industries generates over 85% of its income outside of India. In North America, South America, Australia, and South Africa, the corporation plans to grow market share and expand penetration. “In addition, it has ambitions to expand its production plant in Chile, enhance product offerings, and investigate inorganic development prospects,” according to Religare Broking. ICICI Direct sees the large reliance on international markets as a danger. “Because 85 percent of Tega’s revenue comes from outside India, they are exposed to the risks of doing business in other countries, which could harm their business, financial position, and operating results,” they stated.

Qualified institutional buyers will receive 50% of the offering, while retail investors will receive 35% and non-institutional buyers would receive 15%. The promoter group’s shareholding will decline from 85.17 percent to 79.17 percent after the IPO. Public shareholding, on the other hand, will rise from 14.83 percent to 20.83 percent.

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