Data Patterns IPO | Healthy financials with sound orderbook, huge growth potential amid Make in India opportunity boosted investors' sentiment.
Data Pattern India made a stellar start in the stock market as the stock gained 47.69 per cent on December 24 after strong IPO subscription. Healthy financials with strong orderbook and strong growth prospects amid Make in India opportunity boosted investor sentiment.
The stock opened trading at Rs 864 against the issue price of Rs 585 on BSE, while the opening price on National Stock Exchange was Rs 856. This was the 62nd listing in the current calendar year.
The public offering of the defense and aerospace electronics solutions provider was strongly sought after by investors, subscribing over 120 times. The demand from non-institutional investors was higher than others as they bought shares at 254 times their reserves. The portion of eligible institutional investors was booked 191 times, while the portion set aside for retail investors was subscribed 23.14 times.
The public issue has received data pattern of Rs 588.22 crore. The price band of the offer that was opened for bidding last week was Rs 555-585 per equity share.
Data Pattern among few vertically integrated defense and aerospace electronics solution providers, is catering to the indigenously developed defense products industry. The company has a strong order book which has grown at a CAGR of 40 per cent during FY18-1HFY22. Its order book stood at Rs 581.3 crore as of September 2021.
The company has developed end-to-end capabilities to meet the entire spectrum of defense and aerospace platforms, including processors, power, radio frequencies and microwaves, embedded software and firmware, and mechanical engineering. It had registered revenue growth at a CAGR of 31 per cent during FY19-FY21, and profit grew at a CAGR of 169 per cent during the same period, while EBITDA margin increased from 19.5 per cent in FY19 to 41.1 per cent in FY21.
Given the growth potential on strong orderbook, healthy financials, innovation centric business model and huge market opportunities in Indian Defense and Aerospace in the coming years, all brokerages gave a thumbs up to Data Pattern IPO.
Click here to Read MedPlus Health Services lists at Rs 1,040, a 30% premium over issue price
“We like Data Patterns given its vertically integrated business model, well diversified portfolio, strong order book and strong client relationship with consistent financials. The issue price is 55x FY21 P/E (on post issue basis) ), vs 167x for MTAR and 138x for Paras Defense. We believe it can benefit from government incentives on defense/aerospace expenditure. That's why we recommend subscribing," Motilal Oswal he said.
ICICI Direct while awarding subscribe rating to the IPO said, "The innovation centric business model of Data Patterns, large market opportunities in Indian Defense and Aerospace, strong order book across product categories, scalable business model helped sustain profitable growth." Improve your growth and margins over the long term.