TechEra Engineering (India) Limited is a significant player in the Aerospace, Defence, and Automation sector in India, contributing to the country’s technological advancements and enhancing national security. The company's core focus lies in manufacturing high-quality components and systems that adhere to the demanding standards of the Aerospace & Defence industries. Their commitment to quality and innovation positions them as a crucial contributor to India's defense capabilities.

The TechEra Engineering IPO, a Book Built Issue amounting to ₹35.89 Crores, consists entirely of a Fresh Issue of 43.77 Lakh Shares. The subscription period for this IPO opens on September 25, 2024, and closes on September 27, 2024. Following the subscription period, the allotment is expected to be finalized on or about September 30, 2024, with shares listed on the NSE SME around October 3, 2024.

The share price band for the TechEra Engineering IPO is set between ₹75 to ₹82 per equity share, with a minimum lot size of 1,600 shares. This means that retail investors need to make a minimum investment of ₹1,31,200, while High-Net-Worth Individuals (HNIs) are required to invest in 2 lots (3,200 shares), totaling ₹2,62,400.

The book-running lead manager for this IPO is SKI CAPITAL SERVICES LIMITED, while KFIN TECHNOLOGIES LIMITED serves as the registrar for the issue. The market-making is supported by both SKI Capital Services Limited and Acme Capital Market Limited.

As per the Grey Market Premium (GMP), the TechEra Engineering IPO is expected to show a range between ₹10 to ₹13 based on the company’s financial performance. It’s essential to note that real trading based on Grey Market Premium does not occur, and actual price discovery can only happen after the shares are listed on the stock exchange. The GMP fluctuates based on the demand and supply of shares in an unregulated manner and is mentioned for informational purposes only.

The live subscription status of TechEra Engineering as of 04:28 PM on September 27, 2024, indicates that the IPO has been subscribed 63.77 times on its final day. Investors can check the live subscription status at the NSE.

In terms of Anchor Investors, TechEra Engineering has successfully raised ₹10.22 Crore by allocating 12,46,400 equity shares at a price of ₹82 per share in consultation with the book-running lead managers.

How to Check Allotment Status:

The allotment date for the TechEra Engineering IPO is set for September 30, 2024. Here’s a quick guide on how to check your allotment status online:

Navigate to the IPO allotment status page.

Select TechEra Engineering Limited IPO from the dropdown list.

Enter your application number, PAN, or DP Client ID.

Submit the details to view your allotment status.

Objectives of TechEra Engineering IPO:

The proceeds from the fresh issue will be utilized for the following objectives:

₹2000.00 Lakhs for funding capital expenditure related to new machinery purchases.

₹600.00 Lakhs for working capital requirements.

₹500.00 Lakhs for the prepayment or repayment of certain outstanding borrowings.

General corporate purposes.

To cover issue expenses.

Financial Performance:

Financially, TechEra Engineering reported a revenue of ₹3,907.66 Lakhs in Fiscal 2024, up from ₹2,659.13 Lakhs in Fiscal 2023 and ₹736.74 Lakhs in Fiscal 2022. The EBITDA for these years was ₹901.38 Lakhs, ₹424.74 Lakhs, and ₹-357.69 Lakhs, respectively. Furthermore, the Profit after Tax was ₹482.25 Lakhs in Fiscal 2024, compared to ₹130.50 Lakhs in Fiscal 2023 and a loss of ₹628.70 Lakhs in Fiscal 2022.

For the TechEra Engineering India IPO, the company is offering shares at a pre-issue EPS of ₹4.14 and a post-issue EPS of ₹3.83. The pre-issue P/E ratio stands at 19.80x, while the post-issue P/E ratio is 21.40x, contrasting with the industry P/E ratio of 84.98x. The company has shown a ROCE of 23.47% and ROE of 30.33% for FY24, indicating a fair pricing strategy for the IPO.

Expert Recommendation:

Considering the Grey Market Premium (GMP) indicating potential listing gains of 10% - 15%, and given the financial performance and valuation of the IPO, expert analysts recommend avoiding the TechEra Engineering India Limited IPO for both listing gains and long-term investment purposes.

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