M&B Engineering plans to raise Rs.653 crore via IPO, files DRHP with SEBI

M&B Engineering Ltd., a Gujarat-based company, very well known for its pre-engineered buildings (PEBs) and self-supported roofing solutions, has just filed its Draft Red Herring Prospectus (DRHP) with SEBI, to raise a whopping Rs.653 crore through its upcoming initial public offering (IPO), with plans to pump in funds in order to strengthen the company’s position.

What’s in the IPO?

The IPO structure is a mix of a fresh equity share issue worth Rs.325 crore and an offer-for-sale (OFS) component totaling Rs.328 crore from its promoters. Notable names like Girishbhai Manibhai Patel and Chirag Hasmukhbhai Patel are looking to cash in, selling shares valued at Rs.132.6 crore and Rs.110 crore, respectively.

So, how will M&B Engineering utilize these funds? Well, Rs.63.9 crore will be set aside for buying new equipment and machinery, while Rs.60 crore will go towards paying down debt. Additionally, the company plans to allocate Rs.110 crore for working capital needs, keeping its operations smooth. With total borrowings at Rs.386 crore as of August 2024, this financial boost comes at a crucial time.

Who Are They in the Market?

Claiming a 75% market share, M&B Engineering is a big name in the self-supported steel roofing sector. Their business is split between the Phenix division, which tackles PEBs and complex structural steel components, and the Proflex division, focusing on self-supported roofing. With over 8,700 projects under their belt across various industries like manufacturing and logistics, they’ve clearly established themselves as a go-to player.

Despite facing a 9.7% dip in revenue, M&B Engineering managed to report a strong net profit of Rs.45.6 crore for FY24, a 38.7% increase from the previous year. This is thanks to better operational efficiency and lower input costs.

Conclusion: Wrapping Up, with India’s IPO market buzzing over 235 companies raising more than Rs.71,000 crore in 2024, M&B Engineering’s entry seems well-timed. With a solid game plan and strong market presence, this IPO could be one to watch!

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.