Tega Industries Limited IPO

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i. Tega Industries is a leading manufacturer and distributor of specialized ‘critical to operate’ and recurring consumable products for the global mineral beneficiation, mining and bulk solids handling industry. Globally, they are the second largest producers of polymer-based mill liners, on the basis of revenues

ii. It offers comprehensive solutions to marquee global clients in the mineral beneficiation, mining and bulk solids handling industry, through its wide product portfolio of specialized abrasion and wear-resistant rubber, polyurethane, steel and ceramic based lining components, used by their customers across different stages of mining and mineral processing, screening, grinding and material handling, including after-market spends on wear, spare parts, grinding media and power, which are regular operating expenses for their customers.

iii. Their engineering capability, which has evolved over decades, has enabled them to consistently offer our quality, complex manufactured products within stipulated timelines, allowing them to reduce downtime and maximize operational efficiency for their customers, and forge robust relationships with its customers leading to high recurring revenues.

iv. It commenced operations in 1978 in India, with a foreign collobaration with Skega AB, Sweden. Madan Mohan Mohanka acquired the entire equity stake of Skega AB in the Company in 2001.

v. Its product portfolio comprises more than 55 mineral processing and material handling products.

vi. Their products offering include consumables required in the mines and mineral processing industry. In the sequence of their usage in the mineral processing value chain, after blasting to floatation, its products include chutes and its liners, grinding mill liners, trommels and screens, hydrocyclones, pumps and flotation parts and conveyor products.

vii. They have six manufacturing sites, including three in India, at Dahej in Gujarat and at Samali and Kalyani in West Bengal, and three sites in major mining hubs of Chile, South Africa and Australia

Competitive Strengths :

i. Leading producer of specialized and “critical to operate” products
ii. Insulated from mining capex cycles
iii. High value add and technology intensive products

Objects of the Tega Industries Limited IPO:

The objects of the Offer are to achieve the benefits of listing the Equity Shares on the Stock Exchanges and for the Offer for Sale of up to 13,669,478 Equity Shares.
DRHP of Tega Industries Limited IPO
RHP of Tega Industries Limited IPO

Tega Industries Limited IPO Details:

Open Date: Dec 01 2021
Close Date: Dec 03 2021
Total Shares: 13,669,478
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built
Issue Size: 619.23 Cr.
Lot Size: 33 Shares
Issue Price: ₹ 443 - 453 Per Equity Share
Listing At: NSE,BSE
Listing Date: Dec 13 2021

Promoters And Management:

i. Madan Mohan Mohanka, is one of the Promoters of the Company, and the Chairman and Executive Director of the Company. He holds a bachelor’s degree in science (engineering) from Ranchi University and a post graduate diploma in business administration from Indian Institute of Management, Ahmedabad. He has been associated with the Company since its incorporation. ii. Mehul Mohanka, is one of the Promoters of the Company, and the Managing Director and Group CEO of the Company. He holds a bachelor’s degree in commerce from University of Calcutta. He also holds a master’s degree in business administration from the University of Pittsburgh. Further, he has completed an advanced management program from Harvard Business School. He has been associated with the Indian Chamber of Commerce as a vice president. iii. Syed Yaver Imam, is the Executive Director of the Company and has been designated as the Director – Global Product Group, pursuant to an agreement dated May 31, 2019 entered into between the Company and Syed Yaver Imam. In the past, he has been designated as a Non-executive director on the Board from June 1, 2019 to March 31, 2021. The Board has redesignated him as an Executive Director with effect from April 1, 2021, in accordance with applicable law.

Financials of Tega Industries Limited IPO:

Particulars (in Cr) 2021 2020 2019
Revenue 856 695 634
Cost of materials consumed 328 284 265
Gross Profit 61.68% 59.14% 58.20%
Change in inventory in WIP and Finished Goods 4 10 8
Employee Benefit Expense 122 115 111
Other Expenses 171 189 168
EBITDA 239 117 98
OPM 27.92% 16.83% 15.46%
Depreciation 40 38 37
Finance Cost 17 21 23
PBT 183 60 46
PAT 150 60 23
No. of shares 6.62 6.62 6.62
EPS 22.66 9.06 3.47

Comparison With Peers:

As per DRHP, the company has shown AIA Engineering Limited as its peer. AIA Engineering is currently trading at P/E of 30x. Tega Industries IPO is coming at P/E of 38x ( based on last 3 year average EPS).

Recommendation on Tega Industries Limited IPO:

Review and Recommendation of Tega Industries by InvestorZone is 5/10 1. Tega Industries is a leading producer of specialized and “critical to operate” products, with high barriers to replacement or substitution. 2. It is a long standing market player with marquee global customer base and strong global manufacturing and sales capabilities. 3. Tega Industries has D/E of 0.29 which is quite comfortable. 4. Tega Industries has shown excellent growth in top-line and bottom-line. 5. IPO priced reasonably based on FY21 financials. However, on the basis of last 3 years EPS, the IPO appear to be fully priced in.

Lead Manager of Tega Industries Limited IPO:

  1. Axis Capital Limited
  2. JM Financial Consultants Private Limited

Registrar of Tega Industries Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Tega Industries Limited 147, Block-G, New Alipore, Kolkata 700 053, West Bengal, India Phone: +91 33 3001 9000 Email: compliance.officer@tegaindustries.com Website: https://www.tegaindustries.com/

Discussion on Tega Industries Limited IPO:

2 Comments

    It is a pure OFS. That means the money raised via this IPO will go to selling shareholder and nothing will go in company hand.

    Reply

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