Megatherm Induction
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 29 Jan 2024 – 31 Jan 2024
- Listing date
- 05 Feb 2024
- Face value
- ₹10 per share
- Issue price
- ₹108 per share
- Lot size
- 1,200 shares
- Issue type
- Book Building issue
- Total issue size
- ₹53.91 Cr
- Market cap at offer price
- ₹203 Cr
- Promoter holding
- 98.92% → 72.71% pre-issue → post-issue
- ISIN
- INE531R01010
- Registrar
- Bigshare Services Pvt.Ltd.
- Lead managers
- Hem Securities Ltd.
- Registered office
- Plot-L1 Block GP, Sector V, Electronics Complex, Saltlake City, West Bengal
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Anchor investor · within QIB | 14,22,000 | — | — |
| Market maker | 2,50,800 | — | — |
Application size
Minimum 1,200 shares per lot, in multiples, at ₹108
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 1,200 | ₹1,29,600 |
| S-HNI (min) | 2 | 2,400 | ₹2,59,200 |
| S-HNI (max) | 7 | 8,400 | ₹9,07,200 |
| B-HNI (min) | 8 | 9,600 | ₹10,36,800 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Anchor investors
Institutional allocation placed a day before the issue opens, carved out of the QIB portion and locked in after listing.
Valuation and performance
Valuation at offer price
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 10.11 | 8.06 |
| P/E (×) | 10.68 | 13.40 |
| Price to book (×) | 2.95 | — |
| Market cap | — | ₹203 Cr |
Key performance indicators
- Return on net worth
- 27.66%
- ROCE
- 27.47%
- Debt / equity
- 1.67
- PAT margin
- 5.27%
- NAV per share
- ₹36.56
- Price to book
- 2.95
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Megatherm Induction
Megatherm Induction Limited (formerly Megatherm Induction Private Limited, incorporated October 22, 2010) is engaged in the business of manufacturing induction heating and melting products through electric induction, including induction melting furnaces and induction heating equipment. The company also produces upstream and downstream plant and machinery associated with steel melt shops, such as transformers, ladle refining furnaces, continuous casting machines, and fume extraction systems. The company manufactures electric arc furnaces for alloys and special steel-making industries. Its services portfolio includes turnkey solutions for steel plants, involving design, engineering, supply, erection, and commissioning of steel melt shops using both insourced and outsourced plant and machinery, as well as after-sales service including maintenance contracts and spare parts business. The company converted to a public limited company on December 20, 2022.
Company Analysis
from DRHPMegatherm Induction Limited manufactures induction heating and melting equipment, electric arc furnaces, and transformers for the steel, metal, and related industries, offering design, engineering, supply, erection, commissioning, and after-sales services.
Megatherm Induction Limited (formerly Megatherm Induction Private Limited, incorporated October 22, 2010) is engaged in the business of manufacturing induction heating and melting products through electric induction, including induction melting furnaces and induction heating equipment. The company also produces upstream and downstream plant and machinery associated with steel melt shops, such as transformers, ladle refining furnaces, continuous casting machines, and fume extraction systems. The company manufactures electric arc furnaces for alloys and special steel-making industries. Its services portfolio includes turnkey solutions for steel plants, involving design, engineering, supply, erection, and commissioning of steel melt shops using both insourced and outsourced plant and machinery, as well as after-sales service including maintenance contracts and spare parts business. The company converted to a public limited company on December 20, 2022.
Objects of the Issue
- Funding capital expenditure towards construction of factory shed and installation of additional plant and machinery Rs. 1550.45 Lakhs p.22
- To meet Working Capital requirements [●] p.22
- General Corporate Purpose [●] p.22
- Funding capital expenditure towards construction of factory shed and installation of additional plant and machinery Rs. 1550.45 lakhs p.76
- To meet Working Capital requirements [●] p.76
- General Corporate Purpose [●] p.76
- Expansion of manufacturing capacity and capex for new equipment and machinery
- Working capital requirements
- Repayment of borrowings
- General corporate purposes
Issue Structure
- Total Issue
- Upto 49,92,000 Equity Shares aggregating to Rs. [●] Lakhs
- Fresh Issue
- Upto 49,92,000 Equity Shares aggregating to Rs. [●] Lakhs
- Offer for Sale
- Nil
- Price Band
- [●] (to be determined)
- Lot Size
- [●]
- Face Value
- Rs. 10 per Equity Share
Business Model
The company generates revenue from the design, manufacturing, and supply of induction heating and melting equipment, transformers, ladle refining furnaces, continuous casting machines, and related equipment to large industries, primarily the steel and metal sectors. Revenue also comes from turnkey solutions for steel plants (design, engineering, supply, erection, commissioning) and after-sales services (maintenance contracts and spare parts). The company is completely dependent on large industries and organizations that use these products, as they are not designed for general public or home use.
Business Segments
SWOT Analysis
- • Established market presence in induction heating and melting equipment manufacturing(p.22)
- • Strong revenue growth trajectory over three fiscal years(p.37)
- • Improving profitability with significant PAT growth in FY2023(p.23)
- • Capacity utilization improvement demonstrating operational efficiency gains(p.30)
- • Comprehensive service portfolio including turnkey solutions for steel plants(p.22)
- • Strong revenue growth and profitability improvement(p.49)
- • Efficient capital deployment and high returns on equity(p.88)
- • Positive cash generation from operations(p.50)
- • Established manufacturing facility with expansion plans(p.77)
- • Experienced promoter and management team(p.51)
- • Established manufacturing facility with integrated capabilities(p.109)
- • Technical competence in complex manufacturing processes(p.113)
- • Diversified customer base reducing customer concentration risk(p.113)
- • Experienced promoters with deep industry expertise(p.109)
- • Strong financial performance with high profitability growth(p.114)
- • Robust order book supporting future revenue visibility(p.114)
- • Strong revenue growth trajectory(p.114)
- • Established manufacturing presence and operational facility(p.206)
- • International quality certifications demonstrating operational standards(p.206)
- • Diversified product portfolio across steel, foundry and metal working sectors(p.206)
- • Experienced promoter leadership with deep industry expertise(p.206)
- • Strong revenue growth trajectory(p.209)
- • Heavy dependence on few major customers for revenue(p.30)
- • Significant leveraged debt exposure with pledged promoter shareholding(p.28)
- • Group company incurring substantial losses and negative networth(p.31)
- • Low capacity utilization despite recent improvements(p.30)
- • Outstanding trade receivables and doubtful debts indicating collection risks(p.31)
- • No exclusive trademark agreements with corporate promoter(p.31)
- • Leased manufacturing and office facilities with potential renewal risks(p.32)
- • Significant debt burden with short-term borrowings exceeding long-term borrowings(p.48)
- • High inventory levels relative to sales(p.48)
- • High finance costs relative to profitability(p.49)
- • Pledged promoter shareholding as collateral(p.72)
- • Small scale and niche market presence compared to peers(p.88)
- • Significant customer concentration in top 10 customers(p.113)
- • Low capacity utilization limiting production scale(p.117)
- • Operational complexity requiring stringent quality controls(p.113)
- • High debt-to-equity ratio indicating significant financial leverage(p.215)
- • Concentration of ownership and control among promoters(p.177)
- • High dependence on top customer base(p.213)
- • High material cost as percentage of revenue(p.210)
- • Outstanding litigation involving promoters and company(p.216)
- • Growing secondary steel sector driving equipment demand(p.22)
- • Expansion of manufacturing facility and plant machinery capacity(p.22)
- • Secondary metallurgy equipment adoption trend in steel sector(p.22)
- • Export market growth with FOB exports expanding significantly(p.33)
- • Growth in secondary steel sector and induction furnace adoption(p.105)
- • Expansion of foundry industry with shift to induction melting(p.105)
- • Government-backed infrastructure and manufacturing growth initiatives(p.104)
- • Increasing steel consumption across key sectors(p.104)
- • Strong export market for Indian engineering goods(p.100)
- • Indian auto components industry growth potential(p.106)
- • India's steel industry expansion and modernization(p.122)
- • Growing electricity demand driving power sector expansion(p.106)
- • Strategy to expand customer base and market share(p.114)
- • Plans to expand global presence and export operations(p.114)
- • Focus on increasing operational efficiencies and cost reduction(p.114)
- • Expanding export markets across multiple geographies(p.206)
- • Strong order book providing revenue visibility(p.206)
- • Growing domestic steel and foundry sectors(p.206)
- • Turnkey solution offerings creating higher-value opportunities(p.206)
- • Strong growth in export revenue(p.209)
- • Heavy reliance on steel and metal industry cyclicality and slowdowns(p.35)
- • Significant foreign exchange exposure with depreciation risk(p.33)
- • Intense competition with limited industry entry barriers for new competitors(p.36)
- • Restrictive loan covenants limiting operational flexibility and requiring lender approvals(p.41)
- • Macroeconomic risks including inflation, interest rate volatility and economic slowdown(p.44)
- • Outstanding tax litigations against promoter and group companies(p.34)
- • Compliance gaps in corporate regulatory filings creating future penalty risk(p.37)
- • Intense competition in the secondary steel and foundry sector(p.105)
- • Volatility in raw material costs and global economic uncertainty(p.96)
- • Dependence on commodity prices and input cost fluctuations(p.102)
- • Regulatory and environmental compliance requirements(p.105)
- • Global banking sector stress and tightened credit conditions(p.96)
- • Cyclicality and capital intensity of steel and auto industries(p.117)
- • Raw material price volatility and supply risk(p.118)
- • Regulatory compliance requirements for electrical equipment(p.121)
- • Competition from domestic and international manufacturers(p.117)
- • High capital and equipment requirements creating barriers(p.117)
- • Cyclicality and volatility in steel and foundry industries(p.208)
- • Exposure to raw material price volatility(p.209)
- • Dependence on imported raw materials and FX exposure(p.189)
- • Significant regulatory and compliance requirements(p.208)
- • Working capital discrepancies with bank lending conditions(p.174)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Mr. Shesadri Bhusan Chanda | Promoter | 3,600 shares (0.03%) | — |
| Mr. Satadri Chanda | Promoter | 7,500 shares (0.05%) | — |
| Megatherm Electronics Private Limited | Corporate Promoter | 1,36,83,729 shares (98.81%) | — |
| Megatherm Electronics Private Limited | Promoter | 98.81% | — |
| Shesadri Bhusan Chanda | Promoter | 0.03% | — |
| Satadri Chanda | Promoter | 0.05% | — |
| Megatherm Electronics Private Limited | Promoter / Holding Company | 98.81% | — |
| Shesadri Bhusan Chanda | Promoter / Individual Promoter | 0.05% | — |
| Ayati Chanda | Promoter / Individual Promoter | 0.03% | — |
| Satadri Chanda | Promoter / Individual Promoter | 0.03% | — |
| Christina Paul Choudhary | Promoter / Individual Promoter | 0.00% | — |
Leadership
Auto-extracted from the company's DRHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official DRHP before relying on it.