Mamata Machinery IPO: Issue dates, price, and lot size

Mamata Machinery Limited, a packaging company that caters to the FMCG sector, is set to make its market debut through an initial public offering (IPO) valued at ₹179.39 crores. Investors can participate in this exciting opportunity from December 19 to December 23, 2024. It is entirely an offer for sale of 0.74 crore shares.

The IPO presents an attractive entry point for investors, with a carefully structured price band of ₹230 to ₹243 per share and a convenient lot size of 61 shares. For retail investors, this translates to a minimum investment of ₹14,823, offering an accessible gateway to participate in the company's growth potential. The share allotment is expected to be completed on December 24, 2024, with anticipated listing on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on December 27, 2024. 

Mamata Machinery IPO Details

Mamata Machinery IPO is a fundraise worth ₹179.39 crores, an offer for sale of 0.74 crore shares. The IPO will be available for subscription from December 19, 2024, to December 23, 2024, providing an opportunity for investors looking to gain a stake in the packaging sector.

Mamata Machinery IPO Timeline

The Mamata Machinery IPO opens for subscription on December 19, 2024, and closes on December 23, 2024, with allotment slated for December 24, 2024.

Mamata Machinery IPO Review

Mamata Machinery Limited, established in April 1979, is a specialized manufacturer and exporter of packaging machinery, providing innovative solutions for plastic bags, pouches, and extrusion equipment. With a diverse client portfolio spanning FMCG, Food, and Beverage industries, the company serves notable customers including Balaji Wafers, Chitale Foods, and Emirates National Factory for Plastic Industries, demonstrating its robust market presence and technical expertise.

The company boasts a global footprint, having exported machines to over 75 countries and maintaining international offices in Bradenton, Florida, and Montgomery, Illinois, with sales agents across Europe, South Africa, and Asia. As of May 31, 2024, Mamata Machinery operates two manufacturing facilities in India and the USA, supported by a team of 87 skilled engineers and application experts specializing in electronics, mechanics, software, and design, positioning itself as a comprehensive solution provider in the packaging machinery sector.

In this Initial Public Offering (IPO), the company will not directly benefit from the funds raised. All proceeds from the offering will be directed to the Selling Shareholders, with the offering-related expenses being deducted from their portion of the funds.

Mamata Machinery IPO Financials

The Key performance indicators reflect the company's financial health with a Return on Equity (RoE) of 27.76%, Return on Capital Employed (RoCE) of 31.29%, and Debt-to-Equity ratio of 0.09. 

The Return on Net Worth (RoNW) stands at 27.39%, while the PAT Margin is 15.27. On an annual basis, the company's Profit After Tax (PAT) grew by 60.52% while the revenue increased by 14.84% in the financial year ending on March 31, 2024.

Amount in ₹ crores

Mamata Machinery IPO strengths

Mamata Machinery Limited stands out as a robust player in the packaging machinery sector, with a comprehensive product portfolio catering to diverse industries including FMCG, food, and beverages. The company has demonstrated exceptional financial performance, achieving a 10.86% revenue CAGR from FY22 to FY24, with a remarkable 66.51% surge in Profit After Tax. Its global market reach is impressive, with exports to over 75 countries and established offices in the United States, supported by a network of sales agents across Europe, South Africa, and Asia. The company's technological leadership is underscored by advanced manufacturing capabilities that enable product customization and a strong focus on research and development.

The company's strategic advantages include a lean financial structure with a conservative debt-to-equity ratio of 0.09, and a talented team of 87 skilled engineers and experts in electronics, mechanics, and software. Mamata Machinery's experienced management team, led by seasoned professionals like Mahendra Patel and Chandrakant Patel, provides strategic direction and ensures alignment with market demands. Its customer-centric approach, extensive global sales network, and ability to offer end-to-end packaging solutions have helped build a strong reputation. The company's strategic manufacturing locations in India and the USA support cost-effective production and rapid market responsiveness, positioning it as a competitive player in the global packaging machinery market.

Mamata Machinery IPO weaknesses

The company faces several significant challenges that could impact its future performance. It demonstrates heavy dependence on the FMCG, food, and beverage industries, with potential vulnerability to economic downturns in these sectors. The entire IPO is an Offer for Sale (OFS), meaning no fresh capital will be infused into the company. There's considerable risk associated with its customer concentration, with the top 10 customers accounting for 29.19% of revenue. The company is also exposed to volatile raw material prices, which constitute 48.18% of revenue, potentially squeezing profit margins if cost increases cannot be passed on to customers.

Additional weaknesses include sensitivity to global economic conditions, regulatory hurdles in international trade, and environmental concerns that may impact traditional packaging practices. The company's export-heavy business model (70.42% of revenue from international sales) makes it vulnerable to market disruptions and currency fluctuations. Inventory management is another concern, with inventory level days ranging from 255 to 880 days, which could increase operating costs or lead to unfulfilled customer orders. Competitive pressures in the packaging machinery market, potential legal and regulatory proceedings, and the challenge of maintaining a skilled workforce further complicate the company's operational landscape. The lack of an established market for its equity shares and the inherent risks associated with initial public offerings add another layer of uncertainty to the company's financial prospects.

Should you invest in the Mamata Machinery Limited IPO?

The Mamata Machinery Limited initial public offering presents a strategic entry point for investors seeking to explore the dynamic packaging industry. This opportunity invites discerning investors to carefully assess a promising company poised for growth, balancing the excitement of early-stage investment with rigorous financial analysis. By conducting comprehensive research into the company's market position, financial health, and future prospects, investors can transform this IPO from a mere market opportunity into a well-considered investment that aligns with their personal financial goals and risk profile.

FAQs

What is the Mamata Machinery Limited IPO?

The Mamata Machinery Limited IPO is a main-board offering consisting of an offer for sale of 0.74 crore shares with a face value of ₹10, aiming to raise ₹179.39 crores. The share price is set between ₹230 and ₹243, with a minimum order quantity of 61 shares. This IPO will be open for subscription from December 19, 2024, to December 23, 2024. Link Intime India Private Limited is the registrar while Beeline Capital Advisors Private Limited is the book-running lead manager.

When will the Mamata Machinery Limited IPO open?

The Mamata Machinery Limited IPO will open for subscription on December 19, 2024, and will close on December 23, 2024.

When is the Mamata Machinery Limited IPO listing date?

The tentative listing date for the Mamata Machinery Limited IPO is Friday, December 27, 2024.