Mamata Machinery IPO Day 3 Live Updates: Issue subscribed 194.95 times on third day; GMP signals multibagger listing

According to the data on BSE, Mamata Machinery IPO was subscribed 194.9 times at the end of the three-day bidding process on Monday. 

Here's how different quotas were subscribed:

QIB: 235.88x

NII: 274.38x

Retail: 138.08x

Employee: 153.27x

Source: RHP

Mamata Machinery Limited, previously known as Patel Machinery Private Limited, was incorporated on April 17, 1979, as a private limited company under the Companies Act, 1956.

On September 19, 1988, following a special resolution passed by the company's shareholders, the name was changed to Mamata Machinery Private Limited.

Further, on June 5, 2024, the shareholders passed a special resolution to convert the company into a public limited entity. As part of this transition, the company's name was changed to Mamata Machinery Limited.

Total expenses, which primarily included cost of materials consumed, changes in inventories of finished goods and work-in-progress, employee benefit expense, finance expenses, depreciation and amortization expenses, and other expenses for the three-month period ending June 30, 2024, were ₹288.70 million.

Dependence on Raw Materials: Heavy reliance on specific raw materials exposes the industry to supply chain vulnerabilities and price fluctuations. Diversification of sourcing strategies and exploring alternative materials can mitigate these risks and enhance resilience.

Rapid Changes in Technology: The rapid pace of technological advancements poses a challenge for companies that may struggle to keep up. Continuous investment in research and development, along with strategic partnerships, is essential to stay at the forefront of technological innovation.

Costly Skilled Manpower: The need for skilled manpower at a high cost can impact overall operational expenses. Companies should invest in training programs, technology adoption for process efficiency, and strategic workforce planning to mitigate this weakness.

• Among the leading exporters of machinery and equipment for converting machinery, packaging machinery, co-extrusion blown film machinery, and attachments.
• Advanced manufacturing infrastructure and material knowledge to customize systems and products based on customer specifications.
• Technology-driven operations with a strong focus on quality, innovation-led research and development, leading to products that cater to dynamic market requirements.
• Customer-centric operations, with an extensive global sales and distribution network.
• Skilled and experienced management team with a committed employee base.

Mamata Machinery IPO was booked 128.40 times so far on the last day of subscription. Here's how different quotas were subscribed:

QIB: 80.86x

NII: 229.83x

Retail: 112.10x

Employee: 127.68x

Mamata Machinery serves a diverse range of clients, including prominent companies like Balaji Wafers, Chitale Foods, Dass Polymers, Sunrise Packaging, Hershey India, and Emirates National Factory for Plastic Ind LLC. Its machines, branded "Vega" and "Win," are used to produce plastic bags, pouches, and sachets. As of September 30, 2024, the company has installed over 4,500 machines worldwide.

Mamata Machinery operates in the flexible packaging market, which was valued at $49 billion in 2023. This sector is expected to grow at a compound annual growth rate (CAGR) of 12.6% from 2022 to 2027, fueled by rising demand for packaged food and the need for cost-effective packaging solutions.

Mamata Machinery IPO was booked 93.63 times so far on the last day of subscription. Here's how different quotas were subscribed:

QIB: 25.82x

NII: 176.30x

Retail: 96.72x

Employee: 110.84x

The promoters of the company are Mahendra Patel, Chandrakant Patel, Nayana Patel, Bhagvati Patel, Mamata Group Corporate Services LLP, and Mamata Management Services LLP.

As of the date of the Red Herring Prospectus, promoters, in aggregate, held 22,749,820 equity shares, representing 92.45% of the issued, subscribed, and paid-up equity share capital of the Company.

Founded in 1979, Mamata Machinery is one of India’s leading exporters of packaging machinery, holding the seventh position globally with a 3% market share in FY24. Its machines serve industries such as FMCG, food, and beverages, and are used in more than 75 countries, including the US, UAE, Poland, and Spain.

• The company has identified significant risks related to its dependence on the FMCG, Food & Beverage, and Consumer industries. A slowdown or unfavorable changes in these sectors, along with factors impacting the plastic processing, converting, and packaging machines market, could negatively affect its business operations, financial health, and growth prospects.
• A large portion of the company’s revenue is concentrated among its top ten customers, who contributed an average of 30.76% of revenue over the past three fiscal years. Losing any of these key clients or experiencing a decline in their purchasing volumes could harm the company’s financial condition and operational results.
• Furthermore, the company’s business is heavily reliant on exports, with international sales accounting for 70.42%, 65.28%, 71.52%, and 66.13% of revenue for the three-month period ending June 30, 2024, and for fiscal years 2024, 2023, and 2022, respectively. Any disruptions to its export operations could adversely impact cash flow, financial stability, and overall performance.

Mamata Machinery IPO was subscribed 66.26 times so far on the last day of the bidding process. Here's how different quotas were subscribed:

QIB: 4.90x

NII: 121.49x

Retail: 77.42x

Employee: 83.16x

Mahendra Patel is the Chairman and Managing Director of our Company, with over 40 years of experience in the engineering industry. He holds a diploma in mechanical engineering and an MSc in industrial engineering and administration. He oversees the overall management and strategic growth of the Company.

Chandrakant Patel, the Joint Managing Director, has been with the Company since 1990. He holds a Bachelor of Engineering degree and has more than 30 years of experience in machine engineering, handling sales, services, and marketing functions.

Neha Nowlakha, an Independent Director since 2024, holds a bachelor’s degree in commerce and an MSc in international business. With over 20 years of experience in finance, she has worked with Forvol Investment and HSBC Bank.

Subba Bangera, an Independent Director since 2024, holds a BSc from the University of Bombay and has completed an executive development program in production management. He brings more than 20 years of experience in the engineering industry.

Munjal Patel, an Independent Director since 2024, holds a degree in business administration and an MBA from California State University. He has over 20 years of experience in the pharmaceuticals industry and is a director at Lincoln Pharmaceuticals Limited.

Ruchita Patel, an Independent Director since 2024, holds a degree in business administration, is a qualified company secretary, and has a law degree. With over 8 years of experience, she specializes in secretarial compliance and law.

The company has shown consistent growth in both revenue and profits over the past three financial years. Revenue from operations grew from ₹192.25 crore in FY22 to ₹200.86 crore in FY23, and further to ₹236.61 crore in FY24. Similarly, profit after tax (PAT) increased from ₹21.70 crore in FY22 to ₹22.50 crore in FY23, reaching ₹36.12 crore in FY24.

Source: RHP

The objects of the offer are to:

(i) Carry out the Offer for Sale of up to 7,382,340 equity shares by the Selling Shareholders; and

(ii) Achieve the benefits of listing the equity shares on the Stock Exchanges.

Further, the Company expects that the listing of the equity shares will enhance visibility and brand image, provide liquidity to our shareholders, and create a public market for equity shares in India.

Mamata Machinery IPO was subscribed 39.99 times so far on the last day of subscription. Here's how different quotas were subscribed:

QIB: 4.74x

NII: 51.94x

Retail: 54.75x

Employee: 58.69x

Beeline Capital Advisors Private Limited is the book-running lead manager to Mamata Machinery IPO while Link Intime India is the registrar to the issue.

Mamata Machinery IPO is entirely an OFS of 0.74 crore shares. Here's a look at the shareholders selling stake via the OFS:

• Mahendra Patel, a promoter selling shareholder, is offering up to 534,483 equity shares
• Nayana Patel, another promoter selling shareholder, is offering up to 1,967,931 equity shares
• Bhagvati Patel, also a promoter selling shareholder, is offering up to 1,227,042 equity shares
• Mamata Group Corporate Services LLP, a promoter selling shareholder, is offering up to 2,129,814 equity shares
• Mamata Management Services LLP, a promoter selling shareholder, is offering up to 1,523,070 equity shares

Mamata Machinery IPO GMP was ₹260 on Monday, signaling that the stock could list at ₹503 on the bourses, up 107% over its upper end of the price band of ₹243.