Megatherm Induction IPO

Megatherm Induction Limited IPO

Megatherm Induction IPO includes a fresh issue of up to 49,92,000 equity shares aggregating to INR 53.91 crores. The company intends to use the funds raised to secure funds for factory expansion, working capital, and general corporate needs.

Megatherm Induction IPO – Important Details

Megatherm Induction IPO DateJanuary 29, 2024 to January 31, 2024
Megatherm Induction IPO Listing DateFebruary 5, 2024
Megatherm Induction IPO PriceINR 100-108 per share
Megatherm Induction IPO Lot Size1200 Shares
Megatherm Induction IPO Total Issue SizeINR 53.91 crores
Megatherm Induction IPO Basis of AllotmentJanuary 31, 2024
Megatherm Induction IPO Initiation of RefundsFebruary 1, 2024
Megatherm Induction IPO Credit of Shares to DematFebruary 1, 2024
Megatherm Induction IPO Issue TypeBook Built IPO 
Megatherm Induction IPO Listing AtNSE SME

Megatherm IPO – Company Profile

Megatherm Induction manufactures induction heating, melting products, and steel plant equipment. The company provides turnkey solutions for steel plants, covering design, engineering, supply, erection, commissioning, and after-sales services, including maintenance contracts and spare parts business.

Their company serves secondary and primary steel producers, auto ancillaries, ordnance factories, railways, DI pipe producers, and diverse engineering industries. They specialize in providing products for scrap recycling, iron ore conversion, steel production, auto components, and critical parts manufacturing.

Their manufacturing facility, equipped with machinery and testing labs, ensures a smooth process. They prioritize product efficiency, conducting tests at various stages for minimal energy loss. Their in-house lab validates raw materials to predetermined standards.

Megatherm Induction IPO – Fundamental Analysis

Megatherm Induction’s financial performance reflects positive trends. Revenue has steadily increased over three years, indicating growth. Despite rising expenses, profitability improved significantly. Return on Net Worth (RoNW) showed substantial improvement. Earnings per share (EPS) and Net Asset Value (NAV) also exhibited positive trends. 

Revenue

The company’s revenue has been increasing steadily over the past three years, from ₹10,900.92 lakhs in 2021 to ₹26,588.15 lakhs in 2023. This indicates positive revenue growth, which is a good sign for investors.

Expenses

As of 31 March 2021, the company’s expenses amounted to ₹10,501.51 million. Subsequently, by 31 March 2022, expenses had increased to ₹18,694.92 million and further rose to ₹24,660.37 million by 31 March 2023.

Profit and Loss After Tax

The profit and loss after tax have shown significant improvement from ₹309.12 lakhs in 2021 to ₹1,400.41 lakhs in 2023. This indicates that the company’s profitability has been on an upward trend.

Return on Net Worth (RoNW)

The Return on Net Worth (RoNW) as of 31 March 2021 was 8.80%. By 31 March 2022, it had decreased to 3.01%. However, there was a significant improvement in RoNW, which reached 27.66% as of 31 March 2023.

Earnings Per Share (EPS)

The diluted earnings per share (EPS) were ₹2.25 in 2021, ₹0.80 in 2022, and ₹10.11 in 2023. EPS has experienced substantial growth, indicating increased earnings per share for shareholders.

Net Asset Value (NAV) per Equity Share

The Net Asset Value (NAV) per equity share was ₹25.55 in 2021, ₹26.44 in 2022, and ₹36.56 in 2023. The NAV per share has risen over the years, indicating an increase in the underlying asset value.

Total Assets and Liabilities

The company’s total assets grew from ₹14,645.06 lakhs as of 31 March 2021 to ₹19,197.87 lakhs by 31 March 2023. Correspondingly, total liabilities mirrored these figures, reaching ₹19,197.87 lakhs, reflecting a balance between assets and liabilities over this period.

Megatherm IPO Financial Information

ParticularAs at 31 March 2021As at 31 March 2022As at 31 March 2023
Revenue (₹ in lakhs)10,900.9218,783.1326,588.15
Equity (₹ in lakhs)3,512.133,662.235,062.64
Expenses (₹ in Million)10,501.5118,694.9224,660.37
Profit and Loss After Tax (₹ in lakhs)309.12110.101,400.41
RoNW (%)8.803.0127.66
Diluted EPS only (₹)2.250.8010.11
NAV per Equity Share (₹)25.5526.4436.56
Total Assets (in lakhs)14,645.0617,262.7619,197.87
Total Liabilities (in lakhs) 14,645.0617,262.7619,197.87
Debt-Equity Ratio1.231.100.85
Current Ratio1.131.051.01
Inventory TurnoverRatio1.472.482.88

Megatherm Induction Ltd IPO Peer Comparison

Megatherm Induction Ltd IPO peer comparison shows promising signs with positive earnings, a strong RoNW, and a face value of ₹10 per equity share. However, the absence of a P/E ratio may raise investor concerns about valuation.

CompanyTotal Income (₹ in lakhs)Face Value per Equity Share (₹)P/EEPS and Diluted (₹)RoNW (%)NAV per Equity Share (Basic) (₹)
Megatherm Induction Limited26643.8410NA10.1127.66NA
Electrotherm (India) Ltd(Consolidated)308074.0010NA(9.28)NANA

Megatherm IPO Objective

The main objective of Megatherm Induction IPO is to plan a factory expansion, focusing on capacity increase, cost reduction, and exports. Allocate funds for working capital, optimizing profitability, and enhancing creditor days, with the balance funds supporting general corporate goals.

  1. Funding capital expenditure towards constructing a factory shed and installing additional plant and machinery: The Company at Vidyasagar Industrial Park plans an INR.15.96 crore expansion, including an INR 1.05 crore machinery advance. The project aims to increase capacity, reduce processing time, lower costs, and focus on exports, using INR 14.90 crores of net proceeds for new factory shed construction and additional plant and machinery.
  1. To meet the Working Capital Requirement: The Company proposes to utilize INR 26 crores of the Net Proceeds in Fiscal 2024 towards working capital requirements. The Company seeks additional capital for operating capital to enhance profitability, reduce spare parts processing time, and optimize creditor days.
  1. General Corporate Purpose: The Company plans to deploy the balance funds towards the general corporate goals, including meeting operating expenses, initial development costs for projects other than the identified projects, and the strengthening of their business development and marketing capabilities, meeting difficulties which the Company ordinary course of business may not foresee or any other purposes.

 Megatherm Induction IPO Risks and Challenges

Megatherm Induction, with Equity Shares pledged as loan security, faces risks of reduced shareholding and decision-making limitations in case of default. At the same time, reliance on volatile raw material prices and a few customers poses additional business uncertainties.

  • Megatherm Electronics Private Limited, the Corporate Promoter, will pledge Equity Shares as loan security. Default enables lenders to enforce the pledge, potentially reducing shareholding, limiting decisions, and requiring lender approvals, adversely impacting the business and prospects.
  • Their production heavily relies on volatile raw material prices, representing a significant portion of total purchases. The absence of long-term agreements and dependence on purchase orders expose them to supply uncertainties, impacting competitiveness, costs, and profitability.
  • Their substantial reliance on a few customers, with the top ten customers accounting for significant percentages, poses risks such as order reductions, delays, or cancellations, potentially impacting their business, financial condition, results, and prospects.

Megatherm IPO – Industry & Market Potential

Engineering dominates India’s GDP at 3.53%, including iron, steel, non-ferrous metals, industrial machinery, and automobiles. As a permanent Washington Accord member, the sector experiences growth from infrastructure investments, with a significant allocation in the Union Budget 2022-23.

India’s Auto Component industry, valued at $20.1 Bn in FY21, targets $80 Bn exports by 2026, with a $700 Mn trade surplus. The sector aims to become the 3rd largest globally, contributing 2.3% to GDP, and the Indian automotive industry plans to double in size to Rs.15 lakh crores by 2024.

Global electricity demand in 2022, despite challenges from the energy crisis, rose by almost 2%, driven by increased electrification in transport and heating, with India experiencing an 8.4% surge and the United States recording a 2.6% increase.

 Megatherm Induction IPO – Type of Offer

Megatherm Induction’s IPO will issue 49,92,000 new shares aggregating to INR  53.91 crores. This fund will be used for factory expansion, working capital, and general corporate needs.

Megatherm Induction Ltd IPO Offer Size

The offer size of Megatherm Induction’s IPO is INR 53.91 crores, consisting of a fresh issue of 49,92,000 shares.

Megatherm Induction Ltd IPO Allotment Structure

Megatherm Induction’s IPO allotment structure will be as follows: 50% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 35% for Retail Individual Investors (RII) in accordance with SEBI regulations. A portion of the issue is also set aside for the market maker.

Qualified Institutional Buyers (QIB): As per SEBI regulations, 50% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers. These include entities such as banks, mutual funds, and insurance companies.

●  Non-Institutional Investors (NII): 15% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs.2 lakhs.

Retail Individual Investors (RII): The remaining 35% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs.2 lakhs.

  • Market Maker Reservation: A certain percentage or number of shares is reserved for market makers. The company has set aside 40,000 shares for this purpose. 

How to apply for Megatherm Induction IPO?

To apply for the Megatherm Induction IPO through Alice Blue, you would typically follow these steps:

  1. Open a Demat and Trading Account: If you don’t have one already, you would need to open a Demat and trading account with Alice Blue.
  1. Check for IPO Details: Once your account is active, you can check for the Megatherm Induction IPO details in the IPO section of the Alice Blue platform.
  1. Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.
  1. Submit the Application: Confirm all your details and submit your application.

  You can apply for Megatherm Induction IPO at Alice Blue in just a few clicks!

Check Allotment Status: After the allotment process, you can check the allotment status to see if you have received any shares.

Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.

How to Check Megatherm Induction IPO Allotment Status on Alice Blue?

 Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:

  1. Log in to your Alice Blue Account: You can do this through the Alice Blue website or their trading app.
  2. Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.
  3. Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see the status of the IPOs you have applied for.
  4. Select the Megatherm Induction IPO: If you have applied for multiple IPOs, there might be a dropdown menu or a list where you can select the IPO you are interested in. Select the Megatherm Induction IPO.
  5. Check the Status: The status of your application should be displayed here. If the shares have been allocated to you, it would be mentioned here.

If you face any issues, it’s recommended to contact Alice Blue’s customer support for detailed assistance.

Apart from Alice Blue, there are other ways to check the allotment status of the Megatherm Induction IPO:

  • Registrar’s Website: Visit the website of Bigshare Services Private Limited, the registrar of the Megatherm Induction IPO. On the homepage, look for the ‘IPO Allotment Status’ option. You must enter your PAN and application number or Demat account number to check your allotment status. Click on the ‘Submit’ button to view your IPO allotment status.
  • NSE SME: You can also check the allotment status on the official websites of the Bombay Stock Exchange (BSE) SME (Small Medium Enterprise) Platform. You would need your application number and PAN to check the status.

Please note that the allotment status will only be available after the allotment process has been completed, a few days after the IPO window closes.

Megatherm Induction Limited IPO Offer Registrar

The registrar for the Megatherm Induction Limited IPO is Bigshare Services Private Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.

 Contact information for the registrar:

Bigshare Services Private Limited

S6-2, 6th Floor, Pinnacle Business Park, Next to Ahura Centre,

Mahakali Caves Road,

Andheri (East)

Mumbai – 400093,

Maharashtra, India.

Telephone: +91 22 6263 8200;

Email: [email protected]

Website: www.bigshareonline.com

Megatherm Induction IPO FAQs

 What is the allotment date of the Megatherm Induction IPO?

 The allotment date of the Megatherm Induction IPO is January 31, 2024.

 What is the price band of Megatherm Induction IPO? 

The price band of Megatherm Induction IPO is INR 100-108 per share.

What is the size of the Megatherm Induction IPO?

The Megatherm Induction IPO issue includes a fresh Issue of up to 49,92,000 Equity Shares. The company intends to use the funds raised to secure funds for factory expansion, working capital, and general corporate needs.

 What is the listing date of the Megatherm Induction IPO? 

The Megatherm Induction IPO listing date is February 5, 2024.

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