Data Patterns share made a stellar debut on stock market on Friday. On BSE, the defence company opened at Rs 864, a premium of 47.69 per cent over the higher end of the issue price of Rs 585. On NSE, Data Patterns stock listed at Rs 856.05. Data Patterns IPO received stellar response from the investors at the time of subscription. Thanks to strong order book, healthy financials and expected growth in defence sector, Data Patterns share made a bumper listing on the bourses.
Data Patterns IPO opened for subscription from December 14-16. The price band was fixed at Rs 555-585 per share. The company aimed to raise Rs 588 crore through the public issue. Data Patterns IPO is a combination of fresh and offer for sale (OFS). The company will not receive any proceeds from the OFS part of the issue. From the fresh issue net proceeds, Rs 60.8 crore will be used for the prepayment/repayment of the borrowings availed by the company, Rs 95.2 crore will be utilised to fund the working capital requirement and Rs 59.8 crore will go towards funding the upgrades & expansion of the existing manufacturing facilities.
Data Patterns IPO received bids worth 119.6 times against the offer. The portion set aside for the qualified institutional buyers (QIBs) was booked 190 times while that of non-institutional investors (NIIs) saw a subscription of 254 times. The retail investors’ portion was subscribed 23 times, according to the data.
Commenting on the Data Patterns share listing on December 24, Abhay Doshi, founder, UnlistedArena.com said, “As the market is regaining momentum after the recent lows, good traction is seen over primary market pack. The listing of Data Patterns should be impressive as the company enjoys highest EBITDA and ROE (Return on Equity) margins compared to its peers. Recently listed defense sector companies like Mtar Technologies and Paras Defense too rewarded the investors. Data Patterns may list around Rs 900, emanating stellar gains of over 50 per cent.”
“After strong response from investors and trend reversal in the markets after its lows, we are expecting an impressive debut for Data Patterns IPO. As per our assessment, Data Patterns share listing price could be around Rs 820 to Rs 870 against its price band of Rs 555 to Rs 585 per equity share,” said Ravi Singhal, vice chairman at GCL Securities.
Data Patterns is among the few vertically integrated defence & aerospace electronics solutions provider catering to the indigenously developed defence products segment. The company’s offerings cater to the entire spectrum of defence & aerospace platforms — space, air, land and sea. It has proven in-house design & development capabilities and experience of more than three decades in the defence and aerospace electronics space. This capability assisted the company in developing complete systems as well as sub-systems for various strategic defence and aerospace electronics solutions.
From April 1 2018 to H1 FY22, the company has reported a 40.1 per cent CAGR growth in the order book to Rs. 581.3 crore, which is around 2.1x of the TTM revenue. Around 67 per cent and 12 per cent of the order book is from the production contracts and AMCs, which cumulatively lends steadiness to the business. Development contracts formed around 21 per cent of the order book, thereby providing visibility of continued production contracts in the medium term.
The central government’s latest policies seek to build greater self-reliance in Indian defence R&D and manufacturing through a combination of the Aatmanirbhar Bharat mission, DAP 2020, Offsets and the Defence Production & Exports Policy. These policy tailwinds are expected to be one of the key growth drivers for the Indian indigenous defence industry. Further, according to the RHP the capital and stores allocation of the Indian defence budget is expected to grow to $33.2 billion and $9.6 billion, respectively, by FY31. Cumulatively the amount available during the forecast period would be $339 billion.
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