Mamata Machinery IPO: Will the listing warrant a massive response?

Shares of Mamata Machinery will be listed on the stock exchange after a resounding success in the primary market by subscribing 194.95 times. The company which attracted all sections of investors has fixed the issue price at ₹243, the upper end of the price band of ₹230-243.

According to market buzz, the stock is expected to double upon listing. “Given the market sentiment and the massive demand for subscriptions, we expect that the company can list with a strong listing gain with a high probability of generating a return of almost 100 percent on its price of issue,” said Prashanth Tapse, senior vice-president (research), Mehta Equities Ltd.

“We recommend that conservative investors consider achieving profits above our expectations. Although long term investors should consider holding it for long term despite knowing the short term volatility and risks in the markets,” he advised and added to unallocated investors we advise to accumulate if we get post-listing declines due to profit booking attempts.

The Gujarat-based company hit the capital market with a public offering of ₹179.38 crore. The IPO was entirely an offer for sale of 73.82 lakh shares by promoters Mahendra Patel, Nayana Patel, Bhagvati Patel, Mamata Group Corporate Services LLP and Mamata Management Services LLP.

The QIB share was subscribed 235.88 times, while the most aggressive bidders were non-institutionals at 274.38 times. The portion intended for individual investors received offers 138.08 times and that of employees 153.27 times.

The packaging machinery maker has raised over ₹53 crore from key investors in the IPO. Mamata Machinery allotted 22.04 lakh shares to seven funds – 3P India Equity Fund, Authum Investment and Infrastructure, Winro Commercial (India) Ltd, Subhkam Ventures, Chartered Finance and Leasing, Belgrave Investment Fund and Aarth AIF – at ₹243 each.

As the entire issue is an OFS, the company will not receive any proceeds and the entire amount will be returned to the selling shareholders.

The purpose of the initial share sale is to benefit from the benefits of listing its shares on a stock exchange. Additionally, the company anticipates that the listing of the shares will enhance its visibility and brand image, provide liquidity to its shareholders and establish a public market for the shares.

Mamata Machinery provides end-to-end manufacturing solutions for the packaging industry. The company sells its machines under the “Vega” and “Win” brands. It offers a complete range of products, serving the entire value chain of the flexible packaging market.

Beeline Capital Advisors is the sole lead manager of the offering. The shares are expected to be listed on December 27 on the BSE and NSE.