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While conservative investors may book profits at listing, analysts advised long-term investors to hold the Mamata Machinery stock due to its growth potential and reasonable valuations.
The Gujarat-based packaging machinery manufacturer’s ₹179-crore initial public offering (IPO) was booked a whopping 195 times despite a subdued stock market last week. The issue had garnered strong interest from retail, institutional and high-net-worth investors.
According to Shivani Nyati of Swastika Investmart, the company’s strong global presence, including a manufacturing unit in the US, and its consistent growth in revenue and profit underscore its robust fundamentals. The IPO’s reasonable valuation further enhances its appeal. Given the strong investor interest, robust fundamentals, and a healthy GMP, Mamta Machinery is poised for a stellar listing, she said.
Analysts mostly are optimistic about the firm’s growth prospects, citing its extensive product portfolio, global footprint, and leadership in packaging machinery technology. They recommend holding Mamata Machinery shares for the long term on the back of the company’s investments in research and development (R&D) and continuous innovation.
The based company sold its shares in a fixed price range of ₹230-243 apiece. The IPO was entirely an offer-for-sale (OFS) of 73.82 lakh equity shares, by promoters, worth ₹179.38 crore.
Since it’s an OFS, the company will not receive any proceeds from the public issue, and the entire fund will go to the selling shareholders.
The company stated that the objective of the initial share sale is to gain the advantages of listing the equity shares on the stock exchanges.
Additionally, the company anticipates that listing the equity shares will boost its visibility and brand image, provide liquidity to its shareholders, and establish a public market for the equity shares.
Incorporated in 1979, Mamata Machinery Ltd manufactures and exports plastic bags and pouch making machines, packaging machines and extrusion equipment. It provides end-to-end manufacturing solutions for the packaging industry. Products manufactured using its machines are used across several industries as packaging applications, such as the packing of food and FMCG products.
It primarily sells packaging machinery to direct consumer brands catering to the FMCG, Food, & Beverage Industry and bag and pouch making machines to convertors and service providers who, in turn, mainly catering the FMCG and consumer industry. MML’s machineries are also utilized in non-packaging applications, such as e-commerce bags and garment packaging bags.
In FY24, Mamata’s revenue from operations surged to ₹237 crore from ₹201 crore a year ago. The profit after tax in the same period rose to ₹36.1 crore.
