M&B Engineering Files DRHP with SEBI for ₹650 crore IPO

M&B Engineering Ltd. has filed draft papers with the Securities and Exchange Board of India (SEBI) to raise ₹650 crore through an initial public offering (IPO). The IPO comprises a fresh issue of equity shares worth ₹275 crore and an offer for sale (OFS) of ₹375 crore by promoters. The IPO is a book-built issue. M&B Engineering refiled its draft red herring prospectus with SEBI on February 17 after the capital markets regulator returned the IPO paper in December 2024. In September 2024, the Gujarat-based company filed draft papers with SEBI for a Rs 653-crore IPO.

Offer for Sale (OFS) Details

M&B Engineering Limited has outlined an Offer for Sale (OFS) as part of its Initial Public Offering (IPO), where several promoters will divest their shares. 

Funds Allocation

The company plans to use the fresh issue proceeds for capital expenditure, including the purchase of equipment and machinery, building works, solar rooftop grid, and transport vehicles for its manufacturing facilities. The funds will also be used for investment in IT software upgrades and repayment/prepayment of term loans. The allocation of funds is mentioned below:

• ₹63.9 crores would be used to purchase necessary appliances and machinery facilities for the company. 
• ₹60 crores for debt payment and ₹110 crores for the company’s working capital.

Company Profile

M&B Engineering offers comprehensive turn-key solutions, including project design, engineering, manufacturing, and erection for industrial and infrastructure segments. The company has delivered solutions for diverse sectors, including general engineering and manufacturing, food and beverages, warehousing and logistics, power, textiles, and railways. M&B Engineering has two divisions: Phenix Construction (PEBs and complex structural steel components) and Proflex (self-supported steel roofing solutions). The company has undertaken the execution of over 9,400 projects until the end of December 2024 under its Phenix and Proflex divisions. M&B Engineering is the largest player in terms of revenue for the manufacturing and installation of self-supported steel roofing solutions in India, with a market share of 75% in fiscal year 2024. The company has a capacity of 103,800 tons per year for PEB and can produce 1.8 million square meters of Self-Supported Roofing each year.

Financial Performance

In fiscal year 2024, the company's net profit grew sharply by 33.8% from ₹45.5 crore to ₹60.9 crore due to strong operating performance with lower input costs. The company's revenue declined from ₹889 crores to ₹808.3 crores, reflecting a 9.08% decrease year-on-year.

Financial Data:

• Earning Per Share (EPS): ₹9.17
• Return on Net Worth (RoNW): 19.68%
• Net Asset Value (NAV): ₹46.61

Book Running Lead Managers

Equirus Capital Pvt. Ltd. and DAM Capital Advisors Ltd. are the book-running lead managers for the issue. MUFG Intime India Pvt. Ltd. is the registrar of the offer.

Peers Comparison

M&B Engineering competes with listed entities like Pennar Industries, Bansal Roofing Products, HIL, Everest Industries, and Interarch Building Products.

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