Data Patterns (India) Limited IPO

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i. Data Patterns is among the few vertically integrated defence and aerospace electronics solutions provider catering to the indigenously developed defence products industry. Their offerings cater to the entire spectrum of defence and aerospace platforms – space, air, land and sea.

ii. They have design capabilities across the entire spectrum of strategic defence and aerospace electronics solutions including processors, power, radio frequencies (“RF”) and microwave, embedded software and firmware and mechanical engineering. The core competencies include electronic hardware design and development, software design and development, firmware design and development, mechanical design and development, product prototype design and development, functional testing and validation, environment testing and verification and engineering services opportunities.

iii. Its electronic solutions are developed by specialist teams working on areas including complex 20+ layer printed circuit board (“PCB”) designs, field-programmable gate arrays (“FPGA”) based firmware algorithms, all layers of software including operating system porting, device drivers, networking layers, application software, graphical user interface, cartography, signal processing, streaming protocols and waveform engineering.

iv. They have diversified our products and solutions mainly due to our design and development capabilities, and qualified and experienced workforce. As on September 30, 2021, they had 818 employees with more than 500 qualified engineers, including 416 members in our Design & Engineering department.

v. The Company’s design and development capabilities have allowed it to develop complete systems as well as sub-systems for various strategic defence and aerospace electronics solutions. These systems have found applications on various platforms and programmes such as the Tejas Light Combat Aircraft (“LCA”), the Light Utility Helicopter (“LUH”), BrahMos missile programme, precision approach radars and various communications intelligence (“COMINT”) and electronic intelligence (“ELINT”) systems.

Competitive Strengths
i. Innovation focussed business model
ii. Modern certified manufacturing facility of international standards
iii. Consistent track record of profitable growth due to a scalable business model

Objects of the Data Patterns (India) Limited IPO:

The Offer comprises a Fresh Issue of up to [●] Equity Shares, aggregating up to ₹ 2,400 million by the Company and an Offer for Sale of up to 5,952,550 Equity Shares, aggregating up to ₹ [●] million by the Selling Shareholders. The Company proposes to utilise the net proceeds of the Fresh Issue :Srinivasa Gopalan Rangarajan, is the Chairman and Managing Director of our Company. He has been associated with our Company since it's incorporation. He holds a Bachelor’s Degree of Technology in Chemical Engineering from the Faculty of Technology of University of Madras and a Master’s Degree in Science from the Indian Institute of Technology, Madras. He has over three decades of experience in business development, corporate affairs, finance and marketing 1. Prepayment or repayment of all, or a portion, of certain outstanding borrowings availed by the Company 2. Funding working capital requirements of the Company 3. Upgrading and expanding the existing facilities at Chennai 4. General corporate purposes
DRHP of Data Patterns (India) Limited IPO
RHP of Data Patterns (India) Limited IPO

Data Patterns (India) Limited IPO Details:

Open Date: Dec 14 2021
Close Date: Dec 16 2021
Total Shares: 10,055,042
Face Value: ₹ 2 Per Equity Share
Issue Type: Book Built Issue
Issue Size: 588.22 Cr.
Lot Size: 25 Shares
Issue Price: ₹ 555 - 585 Per Equity Share
Listing At: NSE,BSE
Listing Date: Dec 24 2021

Promoters And Management:

i. Srinivasagopalan Rangarajan, is the Chairman and Managing Director of the Company. He has been associated with the Company since its incorporation. He holds a Bachelor’s Degree of Technology in Chemical Engineering from the Faculty of Technology of University of Madras and a Master’s Degree in Science from the Indian Institute of Technology, Madras. He has over three decades of experience in business development, corporate affairs, finance and marketing. ii. Rekha Murthy Rangarajan, is the Whole-time Director of the Company. She has been associated with the Company since its incorporation. She holds a Bachelor’s Degree of Arts in Economics, English and Psychology from the Bangalore University as well as a Master’s Degree of Arts in Applied Psychology from Madras University. She has over two decades of experience in administration, facility maintenance, human resource and development, process engineering and special projects. She has previously been associated with Sterling Computers Limited. She was awarded the Mercedes Benz Ritz Woman of Merit Award in 2015 and the Dr KCG Verghese Excellence Award by the Hindustan Group of Institutions in 2017. iii. Mathew Cyriac, is the Nominee Director of the Company. He has been associated with the Company since June 4, 2021. He holds a bachelor’s degree in technology (mechanical engineering) from Anna University, Madras, and a post-graduate diploma in management from Indian Institute of Management, Bangalore. He has been the recipient of IIMB Medal for securing first rank in his post-graduate diploma. He has about 23 years of experience in investment banking and private equity. He has previously been associated with Bank of America, DLJ Merchant Banking Partners, Credit Suisse First Boston Corporation and Blackstone Advisors India Private Limited.

Financials of Data Patterns (India) Limited IPO:

Particulars (in Millions) March-21 March-20 Mar 19
Revenue 2,240 1,560 1,311
Cost of materials consumed 629 532 454
Increase in inventories 74 28 35
Employee benefits expense 484 422 376
Other Expense 131 145 189
Operating profit 919 431 255
OPM % 41% 28% 19%
Other Income 26 40 14
Finance Cost 145 133 107
Depreciation 55 54 58
Profit Before tax 1,520 1,317 1,221
Profit After Tax 546 210 72
EPS 12 5 2
 

Comparison With Peers:

As per RHP, the company has shown MTAR and Paras Defence as its peer.
Peer Revenue EBITDA OPM PAT NPM P/E Mcap
MTAR 246 83 33.74% 46 18.70% 134 7342
Paras Defence 133 43 32.33% 15 11.28% 188 2,840
Data Patterns 224 91 40.63% 54 24.11% 50 2749
Data Patterns looks fairly valued as compared to MTAR and Paras Defence. Note: All figures are in Crores.

Recommendation on Data Patterns (India) Limited IPO:

Review and Recommendation of Data Pattern by InvestorZone is 6/10 1. Data Pattern have design capabilities across the entire spectrum of strategic defence and aerospace electronics solutions including processors, power, radio frequencies (“RF”) and microwave, embedded software and firmware and mechanical engineering. 2. Company is a beneficiary of government's focus on defence spending in the wake of threats from China and Pakistan. 3. It is available at fair valuation as compared to its peers. 4. Financial metrics like OPM and NPM are also superior in comparison to Peers.

Lead Manager of Data Patterns (India) Limited IPO:

  1. IIFL Holdings Limited
  2. JM Financial Consultants Private Limited

Registrar of Data Patterns (India) Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Data Patterns (India) Limited Plot H9, Fourth Main Road, SIPCOT IT Park, Siruseri, Chennai 603103, Tamil Nadu, India Phone: +91 44 4741 4000 Email: manvi.bhasin@datapatterns.co.in Website: https://www.datapatternsindia.com/

Discussion on Data Patterns (India) Limited IPO:

2 Comments

    Total outstanding shares before IPO is 47,784,086

    PAT = 55 Crores

    EPS = 11.51

    Issue Price = 585

    P/E = 50x

    Reply

    The government’s latest policies seek to build greater self-reliance in Indian defence R&D and manufacturing through a combination of the Aatmanirbhar Bharat mission, DAP 2020, Offsets and the Defence Production & Exports Policy. These policy tailwinds are expected to be one of the key growth drivers for the Indian indigenous defence industry…

    Reply

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