Paras Defence and Space Technologies is looking to open up its initial public offering (IPO) of Rs 170.78 crore on Tuesday. This company is primarily engaged in the designing, manufacturing and even testing of a variety of products and solutions that come under the ambit of defence and space engineering. Paras Defence and Space Technologies has essentially five unique categories of product offerings, these are Defence and Space Optics, Defence Electronics, Heavy Engineering, Electromagnetic Pulse Protection Solutions, as well as Niche Technologies. This company is one of the very few Indian companies with the design capacity for space-optics and optomechanical assemblies. It is also one of the leading providers of optics for various Indian defence and space programmes.
Having said that here are the top 10 things you should know about the Paras Defence IPO before it opens.
10 Key Details about Paras Defence IPO
1) Paras Defence IPO Issue Size, Overview
The Paras Defence IPO has an issue size of Rs 170.78 crore and it also consists of a fresh issue and an offer for sale (OFS). The fresh issue aggregates up to Rs 140.60 crore, while the OFS comes up to Rs 30.18 crore with a total of 1,724,490 equity shares.
2) Paras Defence IPO Dates
The public issue is set to open on September 21, 2021. The company plans to have the IPO open for trading for a total of three days, after which, it will close on the third day, September 23. Any anchor bookings that might take place, would come to a close on the day before the issue opened, i.e., September 20, Monday.
3) Issue Price Band
The Paras Defence IPO has a price band of Rs 165 to Rs 175 per equity share. It also has a face value of Rs 10 per equity share.
4) Paras Defence IPO Grey Market Premium (GMP)
The grey market premium of the Paras Defence IPO on September 20, at the time of this article, stood at Rs 220 according to information from IPO Watch. This indicated that the shares were trading at Rs 385 to Rs 395 on the unlisted grey market.
5) Paras Defence IPO Allotment, Listing
In terms of a date for the basis of allotment, the company is eyeing the date of September 28, 2021. Following that, the company plans to initiate refunds to the unlucky investors who were not able to gain shares during the trading days. Those who do manage to snag a share during trading days will see the same accredited to their Demat accounts on September 30. As far as listing goes, the tentative date stands on October 1, 2021, however, that is yet to be confirmed.
6) IPO Objective
The issue has many objectives. For one, the proceeds will fund the capital expenditure requirements as well as fund the incremental working capital requirements. A portion of it will also go towards the repayment and prepayment of all or a portion of certain borrowings/outstanding loan facilities that were availed by the company. The rest of the funds will go towards general corporate purposes.
7) Issue Lot Size
The Paras Defence IPO has a minimum lot size of 85 shares and an application amount of Rs 14,875. On the higher end, the lot size stands at 1105 shares with an application amount of Rs 193,375. Retail-individual investors (RIIs) can apply for up to 13 lots at the higher end.
8) Investor Reservation for Paras Defence IPO
The qualified institutional buyers (QIBs) have a 50 per cent reservation. The non-institutional investors (NIIs) have a 15 per cent reservation. The RIIs have a reserved portion of 35 per cent for the IPO.
9) Company Promoters
Sharad Virji Shah and Munjal Sharad Shah are the company promoters for the Paras Defence IPO.
10) Company Overview
It should be noted that despite being in a position that makes it one of the very few companies that can cater to a niche in the defence and space technologies market in India, the company does operate in a sector that requires a high level of working capital to survive. However, speaking about the company’s outlook and stance in the industry, AngleOne said, “Paras Defence began its journey back in 2009, and after 12 years, it has successfully positioned itself as a name to recognise in India’s space and defence sector…The company has two state-of-the-art manufacturing facilities in Navi Mumbai and Thane. Paras Defence is one of the few companies that can deliver customised projects associated with defence and space research.”
“The client list of Paras Defence includes names like ISRO, DRDO, Bharat Electronics, Hindustan Aeronautics Limited, Godrej & Boyce, Tata Consultancy Services, Kirloskar Group, Electronics Corporation of India Limited, Bharat Dynamics Limited, and many more,” added AngelOne.