Analysts on Dalal Street hold a bullish view on the initial public offering IPO of Tega Industries, which is set to hit the primary market on December 1. The initial share sale will be sold by the company with a price band of Rs 443 -- 453 per share. Retail investors can bid for a minimum of 33 shares and multiples thereafter. In the afternoon of November 30 the company's shares were hovering at an 82 per cent premium in the unlisted market.
The company, incorporated in 1976, is a leading manufacturer and distributor of specialized, critical, and recurring consumable products for the global mineral beneficiation, mining, and bulk solids handling industry. According to revenue for FY 21, Tega is the second-largest producer of polymer-based mill liners.
It offers a wide product portfolio of specialised abrasion and wear-resistant rubber, polyurethane, steel and ceramic-based lining components used by its customers across different stages of mining and mineral processing, screening, grinding, and material handling.
Domestic brokerages, including Reliance Securities and Religare Broking, are bullish about the IPO.
The company provides a wide range of products and solutions that are critical at different stages of mineral processing, and we believe that it is well placed in the value chain of mineral processing. In the long term, Religare Broking said that the company intends to gain market share, as well as increase penetration in North America, South America, Australia and South Africa because of its leadership position, strong R&D, track record of innovation and track record of developing innovative product portfolio and marquee global customers.
The financial performance of Tega Industries has been impressive over the last two years despite the Covid 19 Pandemic. Revenue recorded 13 per cent CAGR over FY 19 -- FY 21. Operating profit and net profit recorded a stellar 39 per cent and 104 per cent annualized growth during the same period.
There is a chance that the growth momentum will continue. We have a positive view on the company from a long term perspective, Religare Broking said.
Reliance Securities said that the IPO is valued at 22 times FY 21 earnings, which looks attractive compared to its close peer AIA Engineering.
The market size of the global crushing, screening and mineral processing equipment markets, which was $20 billion in 2020, is estimated to be 6.3 per cent CAGR over the next 10 years to around $37 billion. The strong balance sheet, industry leading return ratio, and strong cash generation ability offer an edge over peers, Reliance Securities said in a report.
Abhay Doshi, founder of Unlisted Arena said that TIL is available at a premium of Rs 375. He said that there was enough left on the table and we can anticipate good demand for the issue because of the pricing and growth.