Mamata Machinery IPO opens today: GMP up 82%; Should you subscribe?

Mamata Machinery IPO opens today: The initial public offering (IPO) of manufacturing solutions provider Mamata Machinery is set to open for public subscription today, Thursday, December 19, 2024. At the upper end, the company seeks to raise Rs 179.39 crore from the public offering. The Mamata Machinery IPO comprises an entire offer for sale, with promoters offloading up to 73,82,340 equity shares with a face value of Rs 10 apiece.

 

Mamata Machinery has announced that it has already raised Rs 53.56 crore from anchor investors in a bidding concluded on December 18, 2024.

 

As the public issue opens today, here are the key details of the Mamata Machinery IPO: 

Mamata Machinery IPO grey market premium (GMP)

Ahead of its public offering launch, unlisted shares of Mamata Machinery were commanding a strong premium in the grey market, indicating favorable sentiment for the IPO. 

Sources tracking unofficial markets revealed that Mamata Machinery’s unlisted shares were trading at Rs 443 apiece, reflecting a grey market premium (GMP) of Rs 200, or 82.3 per cent, against the upper end of the IPO price of Rs 243.

 

Mamata Machinery IPO price band, lot size

The company has set the price band at Rs 230-243, with a lot size of 61 shares. Accordingly, investors can bid for a minimum of 61 shares of Mamata Machinery and in multiples thereof. A retail investor would require a minimum of Rs 14,823 to bid for one lot (61 shares), while Rs 1,92,699 is needed to bid for the maximum of 134 lots (793 shares).

 

Mamata Machinery IPO allotment, listing date

The three-day subscription window to bid for the Mamata Machinery IPO is scheduled to close on Monday, December 23, 2024. The basis of allotment is expected to be finalised on Tuesday, December 24, 2024.

 

Shares of Mamata Machinery are slated to debut on the BSE and NSE tentatively on Friday, December 27, 2024.

 

Mamata Machinery IPO objective

As the IPO comprises only an offer for sale, Mamata Machinery, in its Red Herring Prospectus (RHP), said that, “It will not receive any proceeds from the offer proceeds, and all the offer proceeds will be received by the selling shareholders post-deduction of offer-related expenses to be borne by the selling shareholders.”

 

Mamata Machinery IPO review

The company has garnered reviews from brokerages, including Anand Rathi Research and Bajaj Broking, for its IPO.

 

Should You Subscribe to the Mamata Machinery IPO?

 

Anand Rathi Research – Subscribe

Analysts at Anand Rathi Research have recommended subscribing to the Mamata Machinery IPO. They remain optimistic about the company’s continuous investment in R&D and its innovative and technologically adept leadership team with four patents. The company is targeting Europe, Africa, and the Middle East to enhance its global presence.

 

At the upper price band, the company is valued at a P/E of 16.6x with a market cap of Rs 597.9 crore post-issue and a return on net worth of 27.4 percent for FY24. On the valuation front, the analysts believe the IPO is fairly priced compared to its peers. "Therefore, we recommend a 'Subscribe' rating for the IPO."

 

Bajaj Broking – Subscribe for long-term

Brokerage firm Bajaj Broking has also recommended subscribing to the Mamata Machinery IPO from a long-term perspective. "The company's IPO valuation looks promising due to its strong financial health, consistent revenue growth, profitability, and stable cash flow," said Bajaj Broking.

 

According to the brokerage, Mamata Machinery’s strategic presence across polyester, cotton, and technical textile sectors diversifies its revenue streams, reducing dependency on any single segment. Additionally, its longstanding relationships with leading consumer brands and low customer concentration mitigate market risks.

 

"The company’s focus on expanding manufacturing capacity, product innovation, and leveraging technology for sustainable practices enhances its growth prospects, making it an attractive investment opportunity," Bajaj Broking added.

 

About Mamata Machinery

Incorporated in 1979, Mamata Machinery (MML) manufactures and exports plastic bag and pouch-making machines, packaging machines, and extrusion equipment. It provides end-to-end manufacturing solutions for the packaging industry. Products manufactured using its machines are used in several industries for packaging applications, such as food and FMCG products.