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MAMATA MACHINERY IPO

IPO Details

-
-
61 Shares
₹ 14,823
₹ 230 – 243
₹ Up to 179.39 Cr

Issue timeline

  • -
  • 24-Dec-2024
  • 26-Dec-2024
  • 26-Dec-2024
  • 27-Dec-2024

Subscription Status

Shareholder -
Qualified Institutional Buyers -
Non-Institutional Investor -
Retail Individual Investor -
Employee -
Total -

About Company

Mamata Machinery Limited IPO

Mamata Machinery Limited (MML) manufactures and exports machines for making plastic bags, pouches, packaging, and extrusion equipment. The company's IPO opens for subscription this week.

The issue opens for subscription on 19 December and closes on 23 December. Let us look at the various aspects of MML's business to help you decide whether to subscribe or invest in the IPO.

Below are the key details related to the MML IPO:

  • Issue Size: Rs 179.39 crore
  • Price Band: Rs 230 - Rs 243
  • Lot Size: 61 Shares
  • Issue Details: Only Offer for Sale
  • Market Cap: At the upper price band, Rs 597.97 crore
  • Retail Share Offered: 35%
  • Minimum Investment: Rs 14,823

 

Mamata Machinery IPO: The Business

MML manufactures and exports plastic bags and pouch-making machines, packaging machines, and extrusion equipment. They provide end-to-end manufacturing solutions for the packaging industry. Products manufactured using their machines are used across several industries as packaging applications, such as the packing of food and FMCG products.

The company primarily sells its packaging machinery to direct consumer brands catering to the FMCG, Food, & Beverage Industry and bag and pouch-making machines to convertors and service providers who, in turn, mainly catering the FMCG and consumer industry. Their machineries are utilized in non-packaging applications, such as e-commerce bags and garment packaging bags.

They offer a comprehensive range of products serving the entire flexible packaging market value chain covering:

(a) bag and pouch-making machines – which convert rolls of plastic film into bags and pouches.

(b) packaging machines – which are used to fill the end products into pouches categorized as horizontal form fill and seal machines (HFFS), vertical form fill and seal machines (VFFS), and pick fill seal machines (PFS) for smaller volume requirements.

(c) co-extrusion blown film machines – which are used for processing various polymer granules into coextruded multilayer films. The films may have a monolayer, three, five, and seven layers.

They operate two machine manufacturing facilities, one in India and one in the USA. In India, the manufacturing facility is located on Sarkhej - Bavla Highway, Sanand, Ahmedabad, Gujarat. The manufacturing facility in the USA is located in Bradenton, Florida, and it focuses on product applications, the design and development of machines, and the customization of the machines sold in the USA.

Mamata Machinery IPO: Industry Overview

The packaging industry is one of the largest economic sectors in the country, and it is estimated that the Indian packaging industry accounts for approximately 10 to 15% of the global packaging industry. The India Packaging Market, valued at $50.5 billion in 2019, is estimated to have reached $130.14 billion by 2023, experiencing a compounded annual growth rate of 26.7% from 2019 to 2023. This reflects the robust growth of the packaging sector in India, expanding at a rate of 23-28% annually and establishing itself as a preferred hub for the packaging industry.

According to industry sources, the Indian flexible packaging market is valued at $12.92 billion and is estimated to have reached $49 billion in 2023. Further, the industry is estimated to grow at a CAGR of 12.6% between 2022 and 2027. This surge is mainly attributed to the increasing demand for packaged food, driven by the product's convenience and cost-effectiveness.

Mamata Machinery IPO: Listed Peers

In the RHP, the company has mentioned three companies as its peers - Rajoo Engineers, Windsor Machines, and Kabra Extrusion.

Techni. Let us look at the FY24 financial performance of all the companies to give you an idea of where MML stands among its peers. Here are some important numbers:

  • In revenue terms, Kabra Extrusion Techni is the largest player, followed by Windsor and Mamta Machinery.
  • Earning per share (EPS) is highest for MML (Rs 14.65), followed by Kabra Extrusion Techni (Rs 9.80) and Rajoo (Rs 3.41).
  • MML has the highest Return on Net Worth (RoNW) of 27.39%, followed by Rajoo Engineers, with a RoNW of 16.59%.


For more details, you can refer to the table below:

 Company Total income (cr) EPS (Rs) PE RoNW (%)
 Mamata Machinery 241.308 14.65 [.] 27.39
 Rajoo Engineers 201.286 3.41 57.16 16.59
 Windsor Machines 356.918 (1.19) NA (2.89)
 Kabra Extrusion Technik 614.655 9.8 30.64 7.48


Mamata Machinery IPO: Financials

Below are the financial numbers of the company from recent years:

  • Mamata Machinery reported a revenue of Rs 192.25 crore, Rs 200.86 crore, and Rs 236.61 crore for FY22, FY23, and FY24, respectively. The revenue has grown at a CAGR of 10.94% in this period.
  • The EBITDA for FY22, FY23, and FY24 were Rs 29.94 crore, Rs 23.74 crore, and Rs 47.18 crore, respectively. The EBITDA margins for the same period were 15.57%, 11.82%, and 19.94%, respectively.
  • The company has posted a net profit (after exceptional items) of Rs 21.70 crore for FY22, Rs 22.50 crore for FY23, and Rs 36.12 crore for FY24. The PAT margins for the same period were 11.29%, 11.20%, and 15.27%, respectively.
  • For the last three financial years, the company has posted an average EPS of Rs. 11.48 (on a restated consolidated basis) and an average RoNW of 23.08%.
  • If we attribute FY25 annualized earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 6942.86, and based on FY24 earnings, the P/E stands at 16.55.
  • The company reported net debt-to-equity ratios of 0.20, 0.15, and 0.19 for FY22, FY23, and FY24, respectively.
  • Return on Capital Employed (ROCE) for FY22, FY23, and FY24 was 25.73%, 15.71%, and 31.29%, respectively. Return on Equity (ROE) for the same period was 23.12%, 19.41%, and 27.76%, respectively.
 
  Q1FY25 FY24 FY23 FY22
 Revenue (Cr) 27.62 236.61 200.86 192.24
 EBITDA (Cr) -3.15 471.78 237.44 299.38
 EBITDA Margins (%) -1.14 19.94 11.82 15.57
 PAT after exceptional items (Cr) 2.18 361.25 225.05 216.97
 PAT margin after exceptional items (%) 0.79 15.27 11.2 11.29
 Return on Net Worth after exceptional items (%) 0.16 27.39 17.67 20.95
 RoE (%) 0.16 27.76 19.41 23.12
 RoCE (%) -0.78 31.29 15.71 25.73
 Debt Equity Ratio 0.03 0.09 0.15 0.2

 

Mamata Machinery IPO: Competitive Strengths

Below are some of the competitive strengths that investors should consider while evaluating the company:

  • They are among the leading exporters of machinery and equipment for bag and pouch-making machinery, packaging machinery, and co-extrusion blown film machinery and attachment.
  • The company has an 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.
  • As of September 30, 2024, they have a customer base in over 75 countries comprising both end-customer brands and conversion players.

 

Mamata Machinery IPO: Risks

Below are some risks associated with their business:

  • Significant increases or fluctuations in prices of, shortages of, or delays or disruption in the supply of primary materials could affect their estimated costs, expenditures, and timelines which may have a material adverse effect on their business.
  • They are heavily dependent on the performance of the FMCG, Food & Beverage, and Consumer Industries. Any slowdown in these industries will impact their business.
  • MML faces significant competitive pressures in the industry, Their inability to compete effectively would be detrimental to the business and prospects for future growth.
  • They derive a significant portion of their revenue from operations from sales outside India which contributed an average of 67.64% of total revenue for the previous three Fiscals.
vishal-mega-mart IPO

Mamata Machinery IPO

₹ 14,823
61 Shares

Subscription Status

Shareholder -
Qualified Institutional Buyers -
Non-Institutional Investor -
Retail Individual Investor -
Employee -
Total -

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*The financials mentioned above are sourced from DRHP/ RHP documents.

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