Megatherm Induction IPO

Megatherm Induction Limited

₹1,20,000 /1200 sharesMinimum Investment

Megatherm Induction IPO Listing Details

Listed OnIssue PriceListing PriceListing Gains
NSE₹108.00₹198.00₹90.00 (83.33%)

Megatherm Induction IPO Details

Bidding DatesMin. InvestmentLot SizePrice Range
29 Jan ‘24 - 31 Jan ‘24₹1,20,0001,200₹100 - ₹108
Issue SizeIPO Doc
53.91Cr
RHP PDF

About Megatherm Induction

Megatherm Induction manufactures induction heating and melting solutions utilizing electric induction technology. Incorporated in 2010, the company's product range includes induction melting furnaces, heating equipment, transformers, ladle refining furnaces, continuous casting machines, and fume extraction systems. Apart from induction equipment, Megatherm Induction also manufactures electric arc furnaces customized for alloys and steel production. The company provides solutions for steel plants, covering design, engineering, supply, erection, commissioning, and after-sales services, including maintenance contracts and spare parts. Megatherm Induction's products cater to market segments like secondary steel producers with a focus on scrap recycling and primary steel producers engaged in the conversion of iron ore into sponge iron and subsequent steel production through induction melting. The company also serves the needs of auto ancillaries, ordnance factories, railways, and DI pipe producers, along with various engineering industries involved in the production of critical parts within their captive casting, forging, and metalworking units.;
Parent Organisation
Megatherm Induction Limited
Founded
2010
Managing Director
Mr. Shesadri Bhusan Chanda

Strengths & Risks

  • Megatherm Induction operates its manufacturing facilities under WBEIDCL at Vidyasagar Industrial Park in Kharagpur. Equipped with machinery and infrastructure, the facility handles end-to-end metal heating and melting equipment manufacturing, ensuring product quality, efficiency, and cost advantages.
  • The company specializes in complex manufacturing processes, producing items like induction furnaces and transformers with precision and engineering competence. Raw materials are sourced from trusted vendors, after which they undergo stringent quality control at every stage to meet customers' specific requirements in industries such as steel, metal, locomotive, and power distribution.
  • Megatherm Induction maintains a well-diversified customer base across India and globally. The top ten customers contribute a significant portion of revenue. The company's focus on delivering quality, cost-effective, and energy-efficient products has cultivated long-term relationships with customers, including prominent domestic ones like Ordinance Factory, BHEL, Tata Motors, and international clients in South America, Africa, Gulf, Europe, SAARC, and Southeast Asia.
  • Operationally, Megatherm Induction has demonstrated consistent growth in revenue and profitability. The revenue from operations for the Financial Years ended on March 31, 2023, March 31, 2022, and March 31, 2021, reflecting a CAGR of 56.17%. Profit after tax for the same periods shows a CAGR of 112.84%. Supported by an order book exceeding Rs. 290 crores as of July 31, 2023, the company anticipates further growth.
  • Megatherm Induction has agreements for loans that say its main promoter has to promise some company shares. If the company breaks certain rules in these agreements, lenders can lower the promoter's share ownership, which might harm the company.
  • In Fiscal 2023, 45.05% of Megatherm Induction's total purchases went to the top 10 suppliers. Dependency on a few suppliers for raw materials used in manufacturing induction heating and melting products and transformers exposes the company to risks associated with supply and pricing volatility.
  • Megatherm Induction relies significantly on a limited number of customers, with the top ten customers accounting for 41.98% of revenue in the fiscal year ending March 31, 2023. This dependency exposes the company to risks such as order reductions, delays, or cancellations, which could materially affect its business, financial condition, and results.
  • Megatherm Induction's Group Company has incurred losses in recent years, with losses of Rs. 4.95 crore in 2022, Rs. 15.26 crore in 2021, and Rs. 17.44 crore in 2020. Future operating losses could adversely impact the group company's financial condition and results.
  • As of March 31, 2023, Megatherm Induction had outstanding debtors of Rs. 23.73 crores, including Rs. 3.92 crores in trade receivables overdue for over a year. Doubtful debt amounting to Rs. 1.16 crores has been provisioned for. Customer defaults or delays in payment may materially affect the company's business and financial condition.
  • Megatherm Induction faces outstanding legal proceedings involving the company, promoters, directors, and group companies. Unsuccessful defense in these proceedings could adversely impact the company's business prospects, reputation, and financial condition.
  • The company has a total outstanding indebtedness of Rs. 42.82 crores as of March 31, 2023, exposing it to debt repayment risks that may have an adverse effect on business and results.
  • Megatherm Induction's contingent liability and commitments as of March 31, 2023, amount to Rs. 30.33 crores, potentially impacting its financial condition.

Financials

*All values are in Rs. Cr
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Application details

Apply asPrice bandApply upto
Regular100 - 108₹2 Lakh
High Networth Individual100 - 108₹2 - 5 Lakh
For Megatherm Induction IPO, eligible investors can apply as Regular.
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