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Paras Defence IPO price band fixed at Rs 165-175, to raise Rs 171 crore

Paras Defence IPO price band fixed at Rs 165-175, to raise Rs 171 crore
September 16
15:33 2021

Defence and space engineering products and solutions company Paras Defence and Space Technologies has fixed a price band at Rs 165-175 per equity share for its upcoming initial public offering, as per the information available in daily business newspapers. The offer will open for subscription on September 21, 2021.

The offer comprises a fresh issue of Rs 140.6 crore by the company and an offer for sale of up to 17,24,490 equity shares by existing shareholders including Paras Defence promoters.

The company plans to garner Rs 170.77 crore through its public issue that will close on September 23. Anchor book, if any, will open for one day on September 20, a day before issue opening.

Promoters Sharad Virji Shah and Munjal Sharad Shah will sell 1.25 million shares and 50,000 equity shares via offer for sale. Among others, Ami Munjal Shah will offload 300,000 equity shares, and Shilpa Amit Mahajan and Amit Navin Mahajan will offer 62,245 shares each in the offer for sale.

Before filing the red herring prospectus, Paras Defence had raised Rs 34.402 crore through a pre-IPO placement of 25,52,598 equity shares.

The net proceeds from fresh issue of shares will be utilised for purchase of machinery and equipment; funding incremental working capital requirements, and repaying debts besides general corporate purposes. The offer for sale money will go directly to selling shareholders.

Half of the offer size has been reserved for qualified institutional buyers, 35 percent for retail investors and the rest 15 percent for non-institutional investors.

Investors can bid for a minimum of 85 equity shares in the IPO and in multiples of 85 equity shares thereafter. At upper price band, retail bidders can invest a minimum of Rs 14,875 per lot and the maximum investment by them would be Rs 1,93,375 for 13 lots as they are permitted to invest up to Rs 2 lakh in the issue.

Paras Defence is engaged in designing, developing, manufacturing and testing of a wide range of defence and space engineering products and solutions, catering to four major segments of the defence sector i.e. defence and space optics, defence electronics, electro-magnetic pulse (EMP) protection solutions and heavy engineering.

It is also the sole Indian supplier of critical imaging components such as large sized optics for space applications. It has two manufacturing facilities in Maharashtra.

Currently founders Sharad Virji Shah and Munjal Sharad Shah cumulatively hold 59.53 percent equity shareholding in Paras Defence, taking the total promoter and promoter group shareholding in the company to 79.40 percent and the remaining held by public shareholders including Abakkus Emerging Opportunities Fund 1, which has a 1.01 percent stake in the defence company.

The book running lead manager to the issue is Anand Rathi Advisors.

After disappointing listings in August, the activity in the primary market has slowed down. The data shows that companies that are niche, new age, financially strong or from sectors in demand continue to attract investors including the recent specialty chemical company Ami Organics, but at the same time Vijaya Diagnostic Centre failed to attract optimism. So the subscription of Paras Defence, though it is backed by Abakkus, will be closely watched.

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