Paras Defence and Space Technologies IPO : Subscribe or NOT?

The data has been compiled from various sources and might have small difference but overall theme is to subscribe or not — we will focus on that

Paras Defence IPO– Incorporated in 2009, Paras Defence is an Indian private sector company engaged in designing, developing, manufacturing and testing of a wide range of defence and space engineering products and solutions.

Business — It is one of the leading ‘Indigenously Designed Developed and Manufactured’(IDDM) category private sector companies in India, which caters to four major segments of Indian defence sector i.e. defence and space optics, defence electronics, electro-magnetic pulse (“EMP”) protection solution and heavy engineering. It is also the sole Indian supplier of critical imaging components such as large size optics and diffractive gratings for space applications

Region of operation –Company caters to India 83% revenue and have 17% exports revenue

Offer purpose —  

Purchase of machinery and equipment’s: It has placed orders for ₹6.7 crore for the purchase of new and upgraded machineries, it is yet to place orders for ₹27.9 crore, Funding incremental working capital requirements of the company and Repayment or prepayment of all or a portion of certain borrowings/ outstanding loan facilities availed by the company

Risks

High concentration of revenues from Goverment contracts

Cost overruns is common in fixed contracts (may lead to losses)

Technology risks

Various ongoing court cases may lead to penalty

Strength

Wide range of products and solutions offerings for defence and space applications.

One of the few manufacturers of optics for space and defence application in India.

Companies offerings are aligned with the “Atmanirbhar Bharat” and “Make in India” initiatives by the government.

Strong R&D capabilities with a focus on innovation.

Strong customer relationship with government arms and government organizations.

Strong experienced management.

Future

They are currently developing several new products, such as hyper spectral space camera, ARINC-818 based avionic display and naval periscopes,
and multi and hyper spectral cameras for drones and space, Unmanned Aerial Vehicles, cubesats and anti-drone systems. Looking at horizantal integration, prospects look bright if unfolded as looking currently

Valuations

Valuations are pricey

Should we apply?

People with high risk apetite can subscribe for long term only

Add more if it dips below issue price keeping long term horizon mindset

Others can avoid

In case you have any questions/ queries, please feel free to reach me through Contact Form

Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.

Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.

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