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TEGA INDUSTRIES IPO

  • Writer: Yash Mehta
    Yash Mehta
  • Nov 30, 2021
  • 2 min read


IPO Details:

Price Band: 443-453

Cutoff Price: 453


About Company:


Tega 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, based on sales as of June 30, 2021. Globally, company is the second largest producers of polymer-based mill liners, based on revenues as of June 30, 2021.


Competitive Strengths:

  1. A leading producer of specialized and “critical to operate” products, with high barriers to replacement or substitution.

  2. Insulated from mining capex cycles, as their products cater to after-market spends, providing recurring revenues.

  3. High value add and technology-intensive products, backed by strong R&D and focus on quality control.

  4. Long-standing market player with marquee global customer base and strong global manufacturing and sales capabilities.

  5. Consistent growth, characterized by operational efficiency and high repeat business.

  6. Experienced management team supported by large, diverse and skilled workforce.

Strategies:

  1. Gain market share and customer wallet share across high growth markets.

  2. Leverage in-house R&D capabilities to grow their product offerings and capitalize on future trends.

  3. Expand manufacturing capabilities to achieve better economies of scale.

  4. Explore opportunities for inorganic growth.

  5. Operational efficiencies and margin expansion.

Financial Performance:



Revenue and Net Profit of the company is increasing and company is showing good growth. At EPS of 20.5, the company's P/E is 22.


Objects of the Issue:


The Net Proceeds from the Issue are proposed to be utilised in the following manner:

  1. Offer for Sale

Competitors Comparison:

After comparing with the competitors, Tega Industries seems to be slightly undervalued on the basis of P/E and overvalued on the basis of P/B ratio.


Grey Market Premium:


Our view: GMP of the IPO is good. Valuation seems to be fair in this IPO. I will subscribe to this IPO only for listing gains.


Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

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