Paras Defence and Space Technologies Rs 170.77-crore IPO is scheduled to open for subscription on 21 September, at a cost band of Rs 165-175 per share of the face of Rs 10 every single. In the principal market place, the premium has more than doubled from the situation cost. On Monday, Paras Defence and Space Technologies had been trading at Rs 370, a premium of Rs 195 or 111 per cent, in the grey market place, according to individuals who deal in unlisted shares of the organization. The organization does not have any listed business peers in India.
Analysts say that defence and space-connected manufacturer — Paras Defence and Space Technologies — has a robust order book of about Rs 305 crores as on June 30, 2021, with a nicely-diversified solution portfolio in defense and space optics, defense electronics, heavy engineering and niche technologies. However, on the operational front, leading and bottom-line development appears to be muted. “At the upper band of Rs 175, post fresh issue the asking P/E comes around 43x. The government focus on ‘Make in India’ and higher budgetary allocation for defense sector may prove beneficial to such companies. Also, Liberalised policies and PLI scheme for drones will further benefit such companies,” Abhay Doshi, Founder, UnlistedArena.com, dealing in Pre-IPO & Unlisted Shares, told TheSpuzz Online.
Doshi also added that compact situation size, affordable valuations and focus on defense sector may perhaps create massive fancy in IPO. Paras Defence and Space Technologies weighted typical return on net worth for last 3 fiscals is 11.94 per cent. The Price/earnings ratio based on diluted EPS for FY21 for the organization at the upper finish of the cost band is as higher as 31.53.
The organization is the sole Indian supplier of essential imaging elements such as big size optics and diffractive gratings for space applications in India. It is also one of the major “Indigenously Designed Developed and Manufactured” category private sector providers in India, which caters to the 4 key segments of Indian defence sector i.e. defence & space optics, defence electronics, electro-magnetic pulse (EMP) protection resolution and heavy engineering. “The company has strong R&D capabilities with a focus on innovation. The company is well positioned to benefit from the government’s “Atmanirbhar Bharat” and “Make in India” initiatives. Strong relationships with a diverse consumer base, analysts at JM Financial Services stated.
Those at Choice Broking, have encouraged to subscribe to the situation. “Considering the product profile, Paras Defence and Space Technologies doesn’t have any peer in the listed space. At higher price band of Rs. 175, the company is demanding a P/E multiple of 43.4x (to its FY21 EPS of Rs. 4). Considering its niche product profile & technology, dominant market positioning and vast growth potential, we assign a ‘subscribe’ rating for the issue,” they added.
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