TechEra Engineering (India) Limited made an impressive market debut on October 3, 2024, with its shares listing at ₹125 on the NSE SME segment. This represents a notable 52.5% premium over the IPO price of ₹82. The IPO, valued at ₹35.90 crores, received overwhelming interest from investors, being oversubscribed by 70 times, particularly from non-institutional and retail investors.

Company Overview

TechEra Engineering operates within the Aerospace, Defence, and Automation sectors in India. The company plays a critical role in contributing to the nation's technological advancements and security. With a strong focus on manufacturing, TechEra Engineering is dedicated to producing high-quality components and systems that meet the stringent standards of the Aerospace & Defence industries.

The company’s management team includes experienced promoters:

Nimesh Rameshchandra Desai, with over 30 years of experience in the engineering sector.

Meet Nimesh Desai, who has 5 years of industry experience.

Kalpana Nimesh Desai, who holds a Diploma in Education and possesses over 9 years of diverse experience in the industry.

IPO Details and Subscription

The TechEra Engineering IPO was a Book Built Issue amounting to ₹35.89 crores, consisting entirely of a fresh issue of 43.77 lakh shares. The subscription period for the IPO was from September 25 to September 27, 2024, with the allotment expected to be finalized around September 30, 2024.

The share price band for the IPO was set between ₹75 and ₹82, with a minimum lot size of 1,600 shares. Retail investors needed to invest at least ₹1,31,200, while High-Net-Worth Individuals (HNIs) had a minimum investment requirement of ₹2,62,400 for 2 lots of 3,200 shares.

SKI CAPITAL SERVICES LIMITED served as the book-running lead manager for the IPO, and KFIN TECHNOLOGIES LIMITED acted as the registrar for the issue.

Grey Market Premium and Live Subscription Status

The Grey Market Premium (GMP) for TechEra Engineering shares was expected to be in the range of ₹10 to ₹13 based on the company's financial performance. It is essential to note that no real trading occurs based on GMP, as it primarily reflects unregulated demand and supply dynamics.

As of September 27, 2024, the live subscription status indicated that the TechEra Engineering IPO was subscribed 63.77 times on its final day of subscription.

How to Check Allotment Status

Investors can check their allotment status through the following steps:

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 allocated to the following objectives:

₹2000.00 Lakhs for funding capital expenditure to purchase new machinery.

₹600.00 Lakhs for financing working capital requirements.

₹500.00 Lakhs for prepayment or repayment of a portion of outstanding borrowings.

General corporate purposes.

To cover issue expenses.

Financial Performance

TechEra Engineering has demonstrated strong growth in its financials over the last three fiscal years:

Fiscal 2024: Revenue of ₹3,907.66 lakhs, EBITDA of ₹901.38 lakhs, and a Profit After Tax of ₹482.25 lakhs.

Fiscal 2023: Revenue of ₹2,659.13 lakhs, EBITDA of ₹424.74 lakhs, and a Profit After Tax of ₹130.50 lakhs.

Fiscal 2022: Revenue of ₹736.74 lakhs, EBITDA of -₹357.69 lakhs, and a Loss After Tax of -₹628.70 lakhs.

Valuation Metrics

For the TechEra Engineering IPO, the pre-issue EPS stands at ₹4.14, while the post-issue EPS is expected to be ₹3.83. The pre-issue P/E ratio is 19.80x, and the post-issue P/E ratio is 21.40x, which is significantly lower than the industry P/E ratio of 84.98x. The company's ROCE for FY24 is reported at 23.47%, and the ROE stands at 30.33%, indicating strong financial health.

Investment Recommendation

While the GMP suggests potential listing gains of 10% to 15%, considering the company’s financial performance and valuation metrics, it is recommended that investors avoid the TechEra Engineering India Limited IPO for both short-term listing gains and long-term investment. The lower-than-industry valuation metrics, coupled with concerns regarding the overall performance of the company in the previous fiscal year, warrant cautious evaluation before investment.

Investors looking to explore other investment opportunities can refer to Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance Saathi.

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