Paras Defence & Space Technology IPO - Investment Objective, Features and about scheme

Gaurav Seth
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Gaurav Seth

Paras Defence & Space Technology IPO

Paras Defence & Space Technology is an  Indian private sector company engaged in developing, designing, manufacturing, and testing of a diverse range of defense and space engineering products & solutions. The company is one of the leading private sector company  in the ‘Indigenously Designed Developed and Manufactured’ (“IDDM”) category in India. It caters to 4 major segments in the Indian defence sector i.e. defence electronics, defence  & space optics,  electro-magnetic pulse  (“EMP”)  solution  and heavy engineering.

The defense and space optics operations of the company include manufacturing of high precision optics for space & defense applications such as space and thermal imaging  systems.  It is one of the leading providers of optics for various Indian defense and space programmees. As per F&S reports, it is the only Indian company having the design capabilities for space-optics and optomechanical assemblies. The defence electronics operations of the company include offerings of a wide array of electronic systems & high-performance computing for defence applications, including sub-systems for border defence, tanks, missiles, and naval applications.

The company has 2 manufacturing facilities in Maharashtra, one is located at Nerul in Navi Mumbai and the other one is in Ambernath in Thane.  As of 31 December 2020, their current order book is ₹158.93 crores. The consolidated total income of the company was ₹37.94 crores for the 6-month period ended September 30, 2020, and ₹149.05 crores, ₹157.16 crores, and ₹152.53 crores for the fiscal years ended March 31st in 2020, 2019, and 2018, respectively.

The promoter of the company is Sharad Virji Shah and Munjal Sharad Shah.

Strengths of the Company

  • The company has a wide portfolio of products catering to both defense & space applications
  • Strong R&D capability with a focus on innovation
  • The company is in a good position to avail the benefits of government initiatives like “Atmanirbhar Bharat” & “Make in India”
  • Maintains strong relationships with a diversified customer base
  • The company is one of the few players involved in high precision optics manufacturing for space & defence applications
  • Experienced management team & promoters

Purpose of the IPO

The net proceeds from the IPO could be utilized for the following purposes:

  • To fund the incremental working capital requirements of the company
  • To purchase machinery & equipment
  • Pre-payment or repayment of the borrowings of the company
  • For general corporate purposes

Financial Performance of the company

 For the 6-month period ended 31st September 2020FY 2020FY 2019FY 2018
Total Revenue37.94149.05157.16152.53
Total Expenses38.20127.25130.35122.12
Profit After Tax-0.1319.6518.9725.08
Total Assets492.71365.70317.23240.36

*All the values are in crores and as per DRHP.

Valuation of the Company

 For the 6-month period ended 31st September 2020FY 2020FY 2019FY 2018
Basic Earnings per Share (EPS)-0.056.926.758.99
Diluted Earnings per Share (EPS)-0.056.926.748.99
Return on Net Worth (%)-0.11%15.03%17.16%30.58%
Net Assets Value per Equity share46.0746.0338.9029.38

*As per DRHP. 

Paras Defence & Space Technology IPO DRHP

IPO details:

Face Value₹10 per equity share
Market LotShares
Minimum Order QuantityShares
Price Band₹- ₹ per equity share
Issue typeBook Built Issue IPO
Issue Size-
Fresh Issue₹120 Crores
Offer for Sale-
Listing NSE, BSE

Important IPO dates:

Open DateJune 2021
Close DateJune 2021
Basis of Allotment DateJune 2021
Initiation of RefundsJune 2021
The credit of shares to Demat AccountJune 2021
Listing DateJune 2021

Allocation Quota

Qualified Institutional Buyers (QIBs)Not less than 75%
Non- Institutional Buyers (NIIs)Not more than 15%
Retail InvestorsNot more than 10%

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