Megatherm Induction Limited  - Complete Overview

Megatherm Induction, established in 2010, specialises in making induction heating and melting products like furnaces and heating equipment. They also manufacture equipment for steel plants, including transformers and continuous casting machines. Their services cover turnkey solutions for steel plants, from design to maintenance.

Key markets for their products include secondary and primary steel producers, auto ancillaries, ordnance factories, railways, DI pipe producers, and various engineering industries. They ensure product efficiency by testing raw materials in their in-house laboratory for physical properties and adherence to standards.

Megatherm's manufacturing unit in Kharagpur has a capacity of around 300 furnaces and transformers. As of July 2023, they export products globally and employ 285 permanent staff members.

 

Product Portfolio

1. Induction melting furnace

2. Induction Billet Heaters 

3. Induction Hardening & Heat-Treating Equipment

4. Induction Heating Power Source

5. Transformer

6. Ladle Refining Furnace

7. Electric Arc Furnace

 

              Induction melting furnace                             Transformer

 

Megatherm Induction Limited Overview

Megatherm Induction Limited is slated to be open for subscription from January 29, 2024, to January 31, 2024. This NSE SME IPO follows a Book Built Issue IPO.

Megatherm Induction Limited price is fixed at Rs. Rs. 100 - 108 per share. 

The total issue size of this IPO amounts to Rs.53.91 CR. The company has reserved 50% for institutional investors, 15% for non-institutional investors, and 35% for retail investors. 

Megatherm Induction Limited timetable (Tentative)

Events	Date
IPO Opening Date	29 January 2024
IPO Closing Date	31 January 2024
IPO Allotment Date	1 February 2024
Refund initiation	2 February 2024
IPO Listing Date	5 February 2024

 

Megatherm Induction Limited Details

IPO opening & closing date	29 January to 31 January 2024
Face value	Rs. 10 per share
Issue Price	Rs. 100 - 108 per share
Lot Size	1200 Shares
Price of 1 lot	Rs. 1,29,600
Total Issue Size	4,992,000 shares (aggregating up to Rs. 53.91 CR)
Fresh issue	4,992,000 shares (aggregating up to Rs. 53.91 CR)
Listing at	NSE SME
Issue Type	Book Built Issue IPO
Registrar	Bigshare Services Pvt Ltd

 

Megatherm Induction Limited Lot Details

Application	Lot	Shares
Minimum Lot Investment (Retail)	1 lot	1,200
Maximum Lot Investment (Retail)	1 lot	1,200
Minimum Lot Investment (HNI)	2 lot	2,400

 

 

 

Megatherm Induction Limited Reservation

QIB Shares Offered	Maximum 50%
Retail Shares Offered	Minimum 35%
Other Shares Offered	Minimum 15%

 

Company Financial

In FY 23, the company saw substantial growth in total assets, revenue, and profit, with an increased net worth and total borrowings compared to previous fiscal years.

(Amount In Lakhs)

Period	Mar 31  FY 23	Mar 31  FY 22	Mar 31  FY 21
Total Assets	19,197.87	17,262.76	14,645.06
Total Revenue	26,643.84	18,846.92	10,927.03
PAT	1,400.41	110.10	309.12
Net worth	5,062.64	3,662.23	3,512.13
Reserve & Surplus	4,139.39	2,738.98	2,598.88
Total Borrowings	4,282.04	4,038.80	4,327.04

 

Geography-wise revenue break-up

In FY 23, Megatherm Induction generated 74.33% of its revenue from India and 25.67% from other countries, showing a shift from the previous fiscal years.

( in % age)

Particulars	Mar 31  FY 23	Mar 31  FY 22	Mar 31  FY 21
India	74.33	80.07	65.28
Other countries	25.67	19.93	34.72
Total Revenue	100.00%	100.00%	100.00%

 

Revenue By operations

In FY 23, their revenue totaled, with the majority from operations, showing significant growth compared to previous years. 

(Amount In Lakhs)

Particulars	Mar 31  FY 23	Mar 31  FY 22	Mar 31  FY 21
Revenue from operations	26,588.15	18,783.13	10,900.92
Other Operating Income	55.69	63.79	26.11
Total	26,643.84	18,846.92	10,927.03

 

 

The objective of the Issue

The company intends to use the net proceeds for the following objectives.

• Funding capital expenditure towards the construction of a factory shed and installation of additional plant and machinery.

• To meet Working Capital requirements.

• General Corporate Purpose.

 

Promoters and Management of Megatherm Induction Limited

1. Shesadri Bhusan Chanda. 

2. Satadri Chanda.

3. Megatherm Electronics Private Limited.

Pre-issue Promoter Shareholding	98.92%
Post-issue Promoter Shareholding

 

Megatherm Induction Limited Lead Managers:

•   Hem Securities Limited

 

Peers of Megatherm Induction Limited

Specific financial details are needed for a more in-depth comparison.

 

Name of the company	Face value (Rs. per share)	P/ E	EPS (Basic) (Rs.)
Megatherm Induction Limited	10	10.68	10.11
Electrotherm (india) Ltd.	10		-9.28

Evaluation

The IPO is priced within the range of Rs. 100 to Rs. 108 per share.

Evaluation of P/E Ratio

- Considering the FY23 EPS of Rs 10.11 from the last year, the resulting P/E ratio is 10.68x.

- Taking into account the weighted EPS of Rs 5.70 for the last three years, the P/E ratio amounts to 18.94x.

As a result, the IPO price range, with a P/E ratio ranging from 10.68x.

 to 18.94x seems neutral in comparison to the industry average 16.9x.

 

 

Dividend Policy

The company hasn't paid dividends in past fiscal years. Whether we can pay them in the future depends on factors like profits, past dividend trends, capital needs, legal restrictions, and other relevant considerations evaluated by our Board.

 

IPO's Strengths

1. Established Manufacturing facility

2. Technical capabilities for complex applications

3. Long standing relationship with our customers

4. Capable and Knowledgeable Founders and Management Team

5. Achieving solid financial results with a robust order backlog.

IPO's Weaknesses

1. Loan agreements may lead to reduced promoter shareholding.

2. Vulnerability to raw material supply and pricing fluctuations.

3. Under-utilisation of manufacturing capacities poses a risk.

4. Sole dependency on large industries for product sales.

5. Making most of the money from just a handful of important customers.
   
   

 

 

IPO GMP Today

The GMP of Megatherm Induction Limited is Rs. 110.

Conclusion

Megatherm Induction Limited, with its focus on manufacturing induction heating and melting products, presents a compelling opportunity in the IPO market. The company's established manufacturing facility, technical capabilities, and strong order book contribute to its strengths. However, potential weaknesses such as dependence on large industries and concentration of revenue from key customers should be considered. The IPO is priced within a reasonable range, providing an opportunity for investors.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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