M&B Engineering IPO Overview
M&B Engineering, a prominent player in the manufacturing and installation of self-supported steel roofing solutions in India, has announced its plans to raise substantial funding through an Initial Public Offering (IPO). On September 25, the company submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI), aiming to garner ₹653 crore from the public issue. This initiative reflects the company’s growth ambitions and ongoing commitment to providing high-quality solutions in the steel roofing sector.
IPO Details
Under the proposed IPO, M&B Engineering plans to issue fresh equity shares valued at ₹325 crore. Additionally, existing shareholders will sell shares worth ₹328 crore through an Offer for Sale (OFS). The sale is part of a strategy to improve liquidity and incorporate fresh capital into the business.
Promoters and Pre-IPO Placement
The offer-for-sale will include shares from several key promoters, including:
- Girishbhai Manibhai Patel
- Chirag Hasmukhbhai Patel
- Vipinbhai Kantilal Patel
- Birva Chirag Patel
- Aditya Vipinbhai Patel
- Leenaben Vipinbhai Patel
- Umaben Girishbhai Patel
In preparation for the IPO, the company is also considering a pre-IPO placement aimed at raising ₹65 crore, which could lead to a reduction in the size of the new issue.
Utilization of Funds
The funds raised from the IPO will be strategically allocated to various operational needs, including:
| Purpose | Amount (₹ Crore) |
|---|---|
| Purchase of Equipment and Machinery | 63.9 |
| Debt Repayment | 60.0 |
| Working Capital Needs | 110.0 |
| General Corporate Purposes | Remaining Amount |
As of August 2024, the company’s total outstanding borrowings stood at ₹386 crore, making efficient fund utilization critical for its operations.
Company Background and Market Position
M&B Engineering operates primarily in two significant segments: the Fenix division and the Proflex division. The Fenix division specializes in providing Pre-Engineered Building (PEB) solutions and complex structural steel components, while the Proflex division focuses on self-supported steel roofing systems. With a commanding market share of 75% in FY 2024, M&B Engineering is recognized as a leader in the industry.
Over the years, M&B Engineering has successfully executed more than 8,700 projects across diverse sectors, including general engineering, manufacturing, food and beverage, warehousing and logistics, power, textiles, and railways, solidifying its reputation for excellence.
Competitive Landscape
In the competitive arena, M&B Engineering faces challenges from several listed companies, including Pennar Industries, Bansal Roofing Products, HIL, Everest Industries, and Interarch Building Products. Notably, the company derives a remarkable 73% of its revenue from its Fenix division, with 73% of total revenue in FY 2024 attributed to repeat customers, showcasing strong customer loyalty.
Financial Performance
For the financial year 2024, M&B Engineering reported a significant increase in net profit by 38.7%, amounting to ₹45.6 crore compared to the prior year. However, the company experienced a revenue decline of 9.7%, totaling ₹795 crore. Amidst the revenue challenges, the company achieved an EBITDA growth of 20%, reaching ₹79.6 crore, with a margin increase of 250 basis points to 10% compared to FY 2023.
Conclusion
M&B Engineering’s IPO is a noteworthy development in the Indian capital markets, offering investors an opportunity to participate in the growth trajectory of a leading player in the steel roofing solutions industry. With strategic plans for fund utilization, a robust market position, and promising financial performance indicators, M&B Engineering appears poised for long-term success.
