Data Patterns IPO to open on Dec 14; sets price band at Rs 555-585 per share

Data Patterns (India) Ltd, which supplies electronic systems to defence and aerospace sector, on Thursday said it has fixed a price band of Rs 555-585 a share for its Rs 588 crore initial public offering.

The public issue comprises a fresh issue of shares worth Rs 240 crore and an offer for sale (OFS) of 59.52 lakh equity shares by promoters and individual selling shareholders. The OFS includes sale of up to 19.67 lakh shares each by Srnivasagopalan Rangarajan and Rekha Murthy Rangarajan, up to 75,000 by Sudhir Nathan, up to 4.15 lakh equity shares by G.K. Vasundhara and up to 15.28 lakh equity shares by other existing shareholders.

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The initial public offering (IPO) is expected to fetch Rs 588.22 crore at the upper end of the price band. The company intends to utilise net proceeds from the fresh issue for repayment of debt, funding its working capital and upgradation and expansion of its existing facilities besides general corporate purposes. Half of the issue size has been reserved for qualified institutional investors, 35 per cent for retail investors, and the remaining 15 per cent for non-institutional investors.

Investors can bid for a minimum of 25 equity shares and in multiples of 25 thereafter. Data Patterns is backed by former Blackstone head Matthew Cyriac via Florintree Capital Partners LLP which holds 12.8 per cent stake in the company. Founded by Srinivasagopalan Rangarajan and Rekha Murthy Rangarajan, Data Patterns is a vertically integrated defence and aerospace electronics solutions provider that caters to requirements across space, air, land and the sea.

Its core competencies include design and development across electronic hardware, software, firmware, mechanical, product prototype besides its testing, validation and verification. Its involvement has been found across radars, underwater electronics/communication, electronic warfare suites, avionics, small satellites, automated test equipment, and programmes catering to Tejas light combat aircraft, light utility helicopter, BrahMos and other communication and electronic intelligence systems.

It had developed the first nano satellite “NiUSAT” which was deployed in 2017. In addition, two more satellites are in progress, the draft papers noted. Data Patterns works closely with the defence PSUs such as Hindustan Aeronautics Ltd and Bharat Electronics Ltd as well as government organisations involved in defence and space research like DRDO. The company’s order book has grown at a CAGR (compound annual growth rate) of 40.72 per cent over the last four years and as of July 2021 stood at Rs 582.30 crore.

For FY21, the company’s revenue from operations was at Rs 226.55 crore against Rs 160.19 crore in the preceding fiscal year. Its net profit for the period stood at Rs 55.57 crore as compared to Rs 21.05 crore in 2019-20. IIFL Securities and JM Financial are the book running lead managers to the issue.