Megatherm Induction Limited IPO

Megatherm Induction Limited is set to launch its Initial Public Offering (IPO) worth Rs. 53.91 crores, featuring an exclusive fresh issue of 49.92 lakh shares. Investors can subscribe to the IPO from January 29 to January 31, 2024, with allotment results anticipated on February 1, 2024. The listing on NSE SME is scheduled for Monday, February 5, 2024.

Priced competitively between Rs. 100 to Rs. 108 per share, the Megatherm Induction IPO offers an attractive investment proposition. The minimum lot size for retail investors is 1200 shares, requiring a modest investment of Rs. 129,600. High Net Worth Individuals (HNI) can consider a minimum investment of 2 lots (2,400 shares) amounting to Rs. 259,200.

The IPO is managed by Hem Securities Limited as the book running lead manager, with Bigshare Services Pvt Ltd serving as the registrar. Hem Finlease assumes the crucial role of market maker for Megatherm Induction IPO, ensuring liquidity and stability.

For a comprehensive understanding of the offering, potential investors are encouraged to refer to Megatherm Induction IPO RHP (Red Herring Prospectus) for detailed insights. Don’t miss out on this exciting investment opportunity with Megatherm Induction Limited, poised for success in the evolving market landscape.

Megatherm Induction IPO Details

The Megatherm Induction IPO, scheduled from January 29 to January 31, 2024, is poised to make waves in the market with its enticing details. The face value of each share is Rs. 10, and the price band is set at Rs. 100 to Rs. 108 per share. The lot size for applications is 1200 shares, making it accessible to a wide range of investors.

This Book Built Issue IPO encompasses a total of 4,992,000 shares, aggregating up to Rs. 53.91 Cr. The entire issue consists of a fresh offering of 4,992,000 shares, showcasing the company’s commitment to expansion and growth. The IPO is meticulously structured, creating an opportunity for both retail and High Net Worth Individuals (HNI) to participate.

Upon successful completion, Megatherm Induction IPO is set to list on NSE SME. The pre-issue shareholding stands at 13,848,729 shares, while the post-issue shareholding is expected to rise to 18,840,729 shares, reflecting the positive impact of the IPO.

A noteworthy aspect is the Market Maker portion, consisting of 250,800 shares, ensuring market liquidity and stability. Investors looking for a strategic investment should delve into the comprehensive details provided, seizing the opportunity presented by Megatherm Induction IPO.

Parameters	Details
IPO Date	January 29, 2024, to January 31, 2024
Face Value	₹10 per share
Price Band	₹100 to ₹108 per share
Lot Size	1200 Shares
Total Issue Size	4,992,000 shares (₹53.91 Cr)
Fresh Issue	4,992,000 shares (₹53.91 Cr)
Issue Type	Book Built Issue IPO
Listing At	NSE SME
Shareholding Pre-Issue	13,848,729
Shareholding Post-Issue	18,840,729
Market Maker Portion	250,800 shares

Megatherm Induction IPO Reservation

As Megatherm Induction Limited gears up for its IPO, it strategically allocates shares to different investor categories, ensuring inclusivity and widespread participation.

QIB Shares Offered: Megatherm Induction allocates up to 50.00% of the Net offer to Qualified Institutional Buyers (QIBs). This reserved portion is designed to attract institutional investors, contributing to the overall stability and credibility of the IPO.

Retail Shares Offered: A significant emphasis on retail investors is evident, with not less than 35.00% of the total offer specifically set aside for them. This inclusive approach aims to encourage individual investors, fostering a broad shareholder base.

NII (HNI) Shares Offered: High Net Worth Individuals (HNI) and Non-Institutional Investors (NII) are allocated a reserved portion of not less than 15.00% of the overall offer. This strategic allocation caters to sophisticated investors seeking substantial stakes in the company.

Investor Category	Shares Offered
QIB Shares Offered	Not more than 50.00% of the Net offer
Retail Shares Offered	Not less than 35.00% of the Offer
NII (HNI) Shares Offered	Not less than 15.00% of the Offer

Megatherm Induction IPO Anchor Investors Details

In a prelude to its public offering, Megatherm Induction Limited has successfully raised Rs. 15.36 crore from anchor investors, underscoring a strong vote of confidence in the company’s prospects. The anchor bid date, held on January 25, 2024, witnessed a robust response, with 1,422,000 shares offered to anchor investors.

Anchor Investor Allocation: The anchor portion size amounted to Rs. 15.36 crore, emphasizing the significance of these strategic investments in bolstering the IPO. This segment plays a pivotal role in setting the tone for the overall offering, attracting seasoned investors who are committed to long-term value creation.

Lock-in Periods: The anchor investors demonstrate their commitment through lock-in periods, with 50% of the shares earmarked for a 30-day lock-in period until March 15, 2024. The remaining 50% of the shares are subject to a more extended lock-in period, concluding on June 14, 2024. These lock-in periods underscore the investors’ confidence in Megatherm Induction’s future trajectory and align their interests with the company’s long-term growth.

Bid Date	January 25, 2024
Shares Offered	1,422,000
Anchor Portion Size (In Cr.)	15.36
Anchor lock-in period end date for 50% shares (30 Days)	March 15, 2024
Anchor lock-in period end date for remaining shares (90 Days)	June 14, 2024

Megatherm Induction IPO Grey Market Premium (GMP)

As the Megatherm Induction SME IPO generates anticipation in the market, the Grey Market Premium (GMP) has emerged as a key indicator of investor sentiment. The last GMP reported stands at Rs. 75, as of January 27, 2024, 12:54 PM, showcasing a robust demand for Megatherm Induction shares in the unofficial market.

Estimated Listing Price: With the IPO’s price band set at Rs. 108.00, the estimated listing price is projected at Rs. 183 (cap price + today’s GMP). This implies an expected percentage gain/loss per share of 69.44%, signaling a positive outlook for investors.

Retail Subject to Sauda: Retail investors, subject to Sauda, are positioned with an investment of Rs. 68,400, highlighting the accessibility of Megatherm Induction SME IPO to a diverse investor base.

Daily GMP Trend: Daily GMP updates over the last 9 sessions indicate an upward trajectory in the IPO’s grey market activity. The lowest GMP reported is Rs. 40, while the highest is Rs. 75, affirming a consistent and positive trend leading up to the IPO listing. Investors are advised to stay informed about the daily price trend, as Megatherm Induction SME IPO gears up for what appears to be a strong market debut.

GMP Date	IPO Price	GMP	Sub2 Sauda Rate	Estimated Listing Price	Last Updated
27-01-2024	108.00	₹75 No Change	68400	₹183 (69.44%)	27-Jan-2024 12:54
26-01-2024	108.00	₹75 No Change	68400	₹183 (69.44%)	26-Jan-2024 23:32
25-01-2024	108.00	₹75 No Change	68400	₹183 (69.44%)	25-Jan-2024 23:32
24-01-2024	108.00	₹75 Up	68400	₹183 (69.44%)	24-Jan-2024 23:29
23-01-2024	108.00	₹60 No Change	54700	₹168 (55.56%)	23-Jan-2024 23:30
22-01-2024	108.00	₹60 Up	54700	₹168 (55.56%)	22-Jan-2024 23:24

Megatherm Induction IPO Timeline Tentative Schedule

The Megatherm Induction IPO is set to unfold with a meticulously planned timeline, offering investors clarity and a structured approach to their participation in this significant market event.

IPO Opening and Closing: The IPO window opens on Monday, January 29, 2024, providing investors a window of opportunity until Wednesday, January 31, 2024, to submit their applications. It is crucial for investors to take note of the cut-off time for UPI mandate confirmation, which is 5 PM on January 31, 2024.

Post-Closure Processes: Following the closure of the IPO, the Basis of Allotment will be finalized on Thursday, February 1, 2024. This is a pivotal step in the IPO process, determining the allocation of shares to different categories of investors. Subsequently, the initiation of refunds and the credit of shares to Demat accounts is scheduled for Friday, February 2, 2024, streamlining the post-application procedures.

Listing Date: Investors can anticipate the commencement of trading in Megatherm Induction shares on Monday, February 5, 2024, marking the official listing date. This is the culmination of the IPO journey, as the company’s shares become available for public trading.

As Megatherm Induction Limited embarks on this IPO journey, investors are encouraged to adhere to the outlined schedule, ensuring a seamless and timely participation in one of the most awaited market events of the year. Stay informed and make well-informed decisions as the IPO timeline unfolds.

IPO Open Date	Monday, January 29, 2024
IPO Close Date	Wednesday, January 31, 2024
Basis of Allotment	Thursday, February 1, 2024
Initiation of Refunds	Friday, February 2, 2024
Credit of Shares to Demat	Friday, February 2, 2024
Listing Date	Monday, February 5, 2024
Cut-off time for UPI mandate confirmation	5 PM on January 31, 2024

Megatherm Induction IPO Lot Size

Megatherm Induction IPO have the flexibility to customize their participation, thanks to a well-defined lot size structure. The bidding process allows investors to bid for a minimum of 1200 shares and in multiples thereof, providing adaptability based on individual investment preferences.

Retail Investors: For retail investors, the lot size is set at 1, enabling them to bid for a minimum of 1200 shares, translating to a modest investment of Rs. 129,600. The structure remains consistent for both the minimum and maximum investment, offering retail participants a streamlined approach to navigate the IPO landscape.

High Net Worth Individuals (HNI): In contrast, High Net Worth Individuals (HNI) can opt for a larger investment, with the lot size set at 2. This allows them to bid for a minimum of 2,400 shares, amounting to Rs. 259,200. The HNI lot size offers a more substantial stake in Megatherm Induction, catering to the preferences and financial capacity of this investor category.

Application	Lots	Shares	Amount
Retail (Min)	1	1200	₹129,600
Retail (Max)	1	1200	₹129,600
HNI (Min)	2	2,400	₹259,200

Megatherm Induction IPO Promoters and Shareholding Dynamics

Megatherm Induction Limited ventures into the IPO landscape, it is essential to acknowledge the key figures behind the company’s foundation and growth. Shesadri Bhusan Chanda, Satadri Chanda, and Megatherm Electronics Private Limited collectively stand as the promoters of the company, steering its strategic direction and vision.

Promoters’ Shareholding: The pre-issue shareholding of the promoters stands impressively at 98.92%, underscoring their significant stake in the company prior to the IPO. This robust ownership signifies a deep-rooted commitment to Megatherm Induction’s success and reflects the promoters’ belief in the company’s potential.

Post-Issue Shareholding: Post the IPO, the shareholding dynamics are set to undergo a shift. The promoters’ shareholding is projected to decrease to 72.71%, allowing for broader participation and ownership among the public shareholders. This transition is a positive indication of the company’s intent to expand its investor base and foster a more widely distributed ownership structure.

Share Holding Pre Issue	98.92%
Share Holding Post Issue	72.71%

Overview Megatherm Induction Ltd. Pioneering Induction Heating Solutions Since 2010

Established in 2010, Megatherm Induction Limited has emerged as a prominent player in the manufacturing of induction heating and melting products, specializing in electrical induction technologies. A subsidiary of Megatherm Electronics Private Limited, the company has positioned itself as a leader in the industry, offering a diverse range of cutting-edge solutions.

Product Portfolio: Megatherm Induction’s product portfolio encompasses a spectrum of induction melting furnaces and induction heating equipment. The company extends its expertise to the steel industry, producing transformers, ladle refining furnaces, continuous casting machines, fume extraction systems, and electric arc furnaces catering to alloy and special steel requirements.

Turnkey Solutions: Beyond manufacturing, Megatherm Induction provides comprehensive turnkey solutions for steel plants, offering planning, engineering, delivery, assembly, and commissioning services. The company distinguishes itself by facilitating customer service through maintenance contracts and a robust spare parts business.

Market Segments: Megatherm’s key market segments include secondary and primary steel producers, automotive suppliers, ordnance factories, railroads, DI pipe manufacturers, and various engineering industries. The company plays a vital role in supporting critical operations, recycling scrap, converting iron ore into sponge iron, and contributing to the production of essential components.

Global Presence: Headquartered in Kharagpur, Megatherm Induction operates a state-of-the-art manufacturing unit with a production capacity of around 300 furnaces and transformers. The company’s global reach extends to South America, Africa, the Gulf region, Europe, SAARC, and Southeast Asia, reflecting its commitment to serving diverse markets.

Workforce and Growth: As of July 31, 2023, Megatherm Induction boasts a dedicated team of 285 permanent employees. The company’s commitment to innovation, quality, and customer satisfaction positions it as a dynamic force in the field of induction heating, driving growth and excellence in the years to come.

Megatherm Induction Limited Robust Financial Performance Signals Growth

Megatherm Induction Limited has exhibited a remarkable financial turnaround, showcasing substantial growth in key metrics between the financial years ending on March 31, 2023, and March 31, 2022.

Revenue Surge: Over this period, Megatherm Induction witnessed a notable increase in revenue, soaring by an impressive 41.37%. The revenue figures tell a compelling story, escalating from Rs. 10,927.03 Lakhs in March 2022 to Rs. 18,846.92 Lakhs in March 2023. This surge underscores the company’s ability to capture market opportunities and meet the growing demand for its products and services.

Profit After Tax (PAT) Soars: The profit after tax (PAT) witnessed an extraordinary surge of 1171.94%, marking a substantial leap from Rs. 110.10 Lakhs in March 2022 to Rs. 1,400.41 Lakhs in March 2023. This exponential growth reflects Megatherm Induction’s adept financial management and operational efficiency.

Financial Amount in ₹ Lakhs

Period Ended	30 Sep 2023	31 Mar 2023	31 Mar 2022	31 Mar 2021
Assets	21,040.28	19,197.87	17,262.76	14,645.06
Revenue	14,732.31	26,643.84	18,846.92	10,927.03
Profit After Tax	759.34	1,400.41	110.10	309.12
Net Worth	5,821.98	5,062.64	3,662.23	3,512.13
Reserves and Surplus	4,437.11	4,139.39	2,738.98	2,598.88
Total Borrowing	4,480.46	4,282.04	4,038.80	4,327.04

Balance Sheet Strength: Megatherm Induction’s balance sheet exhibits a robust financial position, with assets increasing steadily over the years. As of September 30, 2023, assets stand at Rs. 21,040.28 Lakhs, reflecting the company’s commitment to sustaining a strong financial foundation.

Net Worth and Borrowings: The net worth of Megatherm Induction has seen significant growth, reaching Rs. 5,821.98 Lakhs in September 2023. Additionally, the company’s prudent financial management is evident in the reserves and surplus, amounting to Rs. 4,437.11 Lakhs. Total borrowings have been managed judiciously, standing at Rs. 4,480.46 Lakhs, indicating a balanced approach to capital structure.

Megatherm Induction IPO  Key Performance Indicator

Megatherm Induction IPO, key performance indicators (KPIs) provide valuable insights into the company’s financial health and potential for growth.

Market Capitalization: The market capitalization of Megatherm Induction IPO stands at a substantial Rs 203.48 Cr, reflecting the market’s assessment of the company’s overall value.

Return on Equity (ROE): Megatherm Induction demonstrates a robust Return on Equity at 27.66%, indicating efficient utilization of shareholder equity to generate profits.

Return on Capital Employed (ROCE): The Return on Capital Employed is commendable at 27.47%, reflecting the company’s effectiveness in deploying capital for productive endeavors.

Debt/Equity Ratio: The Debt/Equity ratio, standing at 1.67, suggests a balanced approach to financing, with a moderate level of debt in the capital structure.

Return on Net Worth (RoNW): The Return on Net Worth mirrors the ROE at 27.66%, emphasizing the company’s ability to generate earnings relative to its net worth.

Price to Book Value (P/BV): Megatherm Induction IPO holds a P/BV ratio of 2.95, indicating the market’s confidence in the company’s book value and growth potential.

These KPIs collectively paint a picture of Megatherm Induction’s financial strength, profitability, and investor confidence. The impressive return metrics underscore the company’s efficiency, while the moderate debt level and favorable P/BV ratio contribute to its attractiveness for potential investors. As the IPO unfolds, these KPIs serve as essential benchmarks for investors seeking a comprehensive understanding of Megatherm Induction’s performance and future prospects.

KPI	Values
ROE	27.66%
ROCE	27.47%
Debt/Equity	1.67
RoNW	27.66%
P/BV	2.95

Objects of the Issue Megatherm Induction IPO Objectives

The Megatherm Induction IPO is poised to raise capital with clear objectives in mind, outlining a strategic plan for the utilization of proceeds. The company aims to channel the funds towards key areas that align with its growth and operational objectives.

Funding Capital Expenditure: A significant portion of the IPO proceeds will be directed towards funding capital expenditure. This includes the construction of a factory shed and the installation of additional plant and machinery. This investment underscores Megatherm Induction’s commitment to expanding its production capabilities and enhancing operational efficiency.

Meeting Working Capital Requirements: Another crucial aspect of fund utilization is addressing working capital requirements. The IPO funds will be instrumental in ensuring a smooth and sustainable flow of capital to support day-to-day operations, manage inventory, and meet operational needs. This strategic allocation reflects the company’s foresight in maintaining financial agility.

General Corporate Purpose: Part of the funds raised through the IPO will be allocated for general corporate purposes. This versatile category allows Megatherm Induction flexibility in utilizing funds for various corporate needs that may arise, contributing to overall business development and stability.