Stellar Start: Megatherm Induction lists at 83% premium at Rs 198 per share on the NSE

Megatherm Induction Limited manufactures induction heating and melting products using electrical induction such as induction melting furnaces and induction heating equipment, debuted on the Indian stock market today.

Upon its debut on the NSE, the stock opened at Rs 198 per share, reflecting an impressive 83% premium compared to the final issue price of Rs 108 per share. The market capitalisation of the company stands at Rs 373 crore on the NSE. As of writing the article it is trading at around Rs 207.90 per share on the NSE.

IPO Proceeds

The net proceeds from the Fresh Offer will be allocated as follows: Funding Capital Expenditure; meeting working capital needs for the company; and for general corporate purposes.

Company profile

Megatherm Induction Limited manufactures induction heating and melting products using electrical induction such as induction melting furnaces and induction heating equipment. Megatherm Induction is a subsidiary of Megatherm Electronics Private Limited.

The company also manufactures upstream and downstream equipment and machinery for steelworks, such as transformers, ladle refining furnaces, continuous casting machines, fume extraction systems, etc., as well as electric arc furnaces for the alloy and special steel industry.

The company also offers turnkey solutions for steel plants, which include the planning, engineering, delivery, assembly, and commissioning of steel plants with its own or outsourced systems and machines, as well as customer service with maintenance contracts and spare parts business.

Megatherm’s key market segments are Secondary steel producers that recycle scrap, primary steel producers that convert iron ore into sponge iron and then convert it into steel through induction melting, automotive suppliers, Ordnance factories and railroads, DI pipe manufacturers, and various engineering industries that produce critical parts in their casting, forging, and metal processing facilities.

Subscription details:

On January 31, 2024, the final day of the IPO window, the IPO witnessed an impressive response, with a subscription rate of 196.11 times. The public issue received remarkable interest, with the retail category being subscribed 200.51 times, while the QIB and NII categories reached a subscription rate of 105.14 and 307.04 times respectively.

The IPO price band was between Rs 100 and Rs 108, with a face value of Rs 10 per share and a lot size of 1200 shares. The total size of the company’s IPO was Rs 53.91 crore, and the final share issue price was fixed at Rs 108 each.

Financial Performance:

Conclusion: 

The key dilemma for investors lies in whether to hold onto their shares. Those who applied for the IPO solely intending to capitalise on listing gains have earned an impressive 83% return over its final issue price on the listing day itself. Investors who applied for the IPO purely for listing gains may consider closing their positions. Conversely, investors with a higher risk tolerance might opt to hold onto their shares for the medium to long term, as this strategy could potentially yield benefits over time.

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.