Mamata Machinery is a global leader in manufacturing and exporting plastic bag and pouch-making machines, with an installed base of over 4,500 machines across 75+ countries. The company specializes in providing solutions for the flexible packaging and converting markets, a sector that requires rapid adaptation to industry changes without compromising on quality or cost competitiveness.

IPO Details

The Mamata Machinery IPO is a Book Built Issue amounting to ₹179.39 Crores, which consists entirely of an Offer for Sale (OFS) of 73.82 Lakh shares. The IPO will be open for subscription from December 19, 2024, to December 23, 2024.

• Price Band: ₹230 to ₹243 per share.
• Market Capitalization: At the upper price band of ₹243 per share, the market capitalization will be ₹597.96 Crores.
• Lot Size: 61 shares, requiring a minimum investment of ₹14,823 for retail investors and ₹2,07,522 for High Net-Worth Individuals (HNIs).
• IPO Subscription: As of December 23, 2024, the IPO was subscribed an impressive 194.95 times, showing strong demand among investors.

Financial Performance

Mamata Machinery's financial performance over the past years has shown steady growth. For the period ending June 30, 2024, the company reported revenues of ₹291.93 million, with significant growth from previous years, as its revenues in FY 2023 and FY 2022 were ₹2,101.29 million and ₹1,965.68 million, respectively. The Profit After Tax (PAT) for FY 2024 stood at ₹2.18 million, a slight dip from ₹361.25 million in FY 2023, reflecting a possible fluctuation in operational costs or market conditions.

The EBITDA for FY 2024 was ₹12.5 million, which also shows growth compared to earlier years, indicating better operational management.

The company has reported a pre-issue EPS of ₹14.65 and a post-issue EPS of ₹14.68. The pre-issue P/E ratio is 16.59x, and the post-issue P/E ratio is 16.55x, which is significantly lower than the industry P/E ratio of 44x, suggesting that Mamata Machinery's shares are attractively priced.

The company's Return on Capital Employed (ROCE) and Return on Equity (RoE) for FY 2024 stand at 31.29% and 27.76%, respectively, indicating a highly efficient and profitable operation.

Grey Market Premium (GMP)

The Grey Market Premium (GMP) for Mamata Machinery's IPO shows a strong potential for 81.24% listing gains. Although GMP is based on unregulated trading and is not an official metric, it provides an early indicator of market sentiment toward the company. The increasing GMP trend suggests that investors are optimistic about the IPO's future performance on the stock exchanges.

Anchor Investors

Mamata Machinery has raised ₹53.56 Crores from Anchor Investors at a price of ₹243 per share. The company has allocated 22,04,202 equity shares to these investors, further validating the company’s strong institutional backing.

Objectives of the IPO

The Offer for Sale (OFS) component of the IPO means that Mamata Machinery will not receive any proceeds from the offering. Instead, the proceeds will go to the selling shareholders after deducting offer-related expenses.

Investment Recommendation

Considering the attractive valuation, strong financial performance, and potential for significant listing gains indicated by the high GMP, we recommend that risk-seeking investors apply for the Mamata Machinery IPO. The company’s solid ROCE and RoE metrics, along with its leadership position in the plastic machinery market, make it a promising option for both listing gains and long-term investment.

The Upcoming IPOs in this week and coming weeks are Citichem India, Indo Farm, Technichem Organics, Leo Dry Fruits, Solar91 Cleantech, Rosmerta Digital and Avanse Financial.

The Current active IPO is Anya Polytech and Unimech Aerospace.

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