Tega lists at 68% premium over issue price
1 min read . Updated: 13 Dec 2021, 11:35 PM IST
PremiumThe ₹620 crore IPO of Tega was subscribed 219.04 times, with the QIB category subscribed around 215 times
Shares of Tega Industries Ltd made a stellar listing on Monday at ₹760, a 68% premium over issue price of ₹453 a piece. However, the stock lost some steam, closing at ₹718 on the NSE. The ₹620 crore initial public offering (IPO) of Tega was subscribed 219.04 times, with qualified institutional buyers category subscribed around 215 times.
“Tega’s strong market position, innovative products, and higher entry barriers are likely to help it maintain its margins, while consistent growth with high repeat business (74%) would augur well in the long run. At the upper end of the price band, it is valued at 22 times price-to-earnings (PE) for FY21," said ICICI Securities.
Tega is a manufacturer and distributor of specialized “critical to operate" and recurring consumable products for the global mineral beneficiation, mining, and bulk solids handling industry.
It is the second-largest producer of polymer-based mill liners globally. Its product portfolio comprises more than 55 mineral processing and material handling products. It has six manufacturing sites including three in India, Dahej in Gujarat and Samali and Kalyani in West Bengal, and another three sites in major mining hubs of Chile, South Africa, and Australia.
“We believe that the company is well placed across the value chain of mineral processing as it provides a wide range of products and solutions that are critical at different stages of mineral processing. Further, its leadership position, strong research and development, track record of developing an innovative product portfolio, and marquee global customers are key positives for the company," said Religare Broking.
Tega has posted revenue compound annual growth rate (CAGR) of 13% over FY19-21 while the net profit CAGR of 104% was aided by 800 basis points (bps) margin expansion and ₹28 crore forex gains in FY21.
“At ₹453, Tega is seeking 22 times its FY21 earnings per share, 25 times after adjusting for forex gains, which is fair," said Angel Broking.
