Bharat Dynamics Ltd IPO is a defense PSUs in India engaged in the manufacture of Surface to Air missiles (SAMs), Anti-Tank Guided Missiles (ATGMs) etc. They are coming up with an initial public offer which will hit the primary market on 13th March 2018 and closes on 15th March 2018. The company aims to raise around Rs 960.94 Cr. by offering shares at Rs 413 – Rs 428 per Equity Share. A discount of Rs 10 per equity share is offered on offer price to retail and employees.The government will sell a total of 22,451,953 shares of Bharat Dynamics, diluting its stake by about 12 percent.
Bharat Dynamics Ltd IPO was incorporated as a private limited company on July 16, 1970 as “Bharat Dynamics Private Limited” with the Registrar of Companies, Hyderabad. They are leading defense PSUs in India engaged in the manufacture of Surface to Air missiles (SAMs), Anti-Tank Guided Missiles (ATGMs), underwater weapons, launchers, countermeasures and test equipment. They are the sole manufacturer in India for SAMs, torpedoes, ATGMs. They are also the sole supplier of SAMs and ATGMs to the Indian armed forces. Additionally, they are also engaged in the business of refurbishment and life extension of missiles manufactured. They are also the co-development partner with the DRDO for the next generation of ATGMs and SAMs.
They operate in an environment characterized by both increasing complexity in factors influencing national security and continuing economic challenges in India and globally. They also continue to invest in technologies to fulfil the requirements of the Indian armed forces and also invest in their people so that they have the necessary technical skills to succeed without limiting their ability.
They have three manufacturing facilities located in
- Hyderabad-Their Hyderabad manufacturing unit is engaged in the manufacture of SAMs, Milan 2T ATGMs, countermeasures, launchers and test equipment.
- Bhanur- Their Bhanur unit is engaged in the manufacture of the Konkurs – M ATGMs, the INVAR (3 UBK 20) ATGMs, launchers and spares.
- Vishakhapatnam- Their Vishakapatnam unit is engaged in the manufacture of light weight torpedoes, the C-303 anti-torpedo system, countermeasures and spares.
They have over 3165 full-time employees, which includes 863 engineers. Their Hyderabad (Akash Division) and Bhanur manufacturing units have AS 9100C certifications (based on and including ISO 9001:2008) from NVT Quality Certification Private Limited. Their quality management systems and management system for the Hyderabad manufacturing have been certified ISO 9001:2008 and ISO 9001: 2015 compliant, by the IR Class Systems and Solutions Private Limited and TUV India Private Limited respectively. They are also in the process of setting up two additional manufacturing facilities at Ibrahimpatnam (near Hyderabad) and Amravati in Maharashtra which shall be used to manufacture SAMs and Very Short Range Air Defense Missiles (VSHORADMs) respectively. They are the nominated production agency for VSHORADMs.
Some of the qualitative factors which form the basis for computing the Offer Price are:
- a) Modern facilities and infrastructure to deliver quality products in a timely manner.
- b) Increase in indigenization of their products and implementation of the “Make in India” policy.
- c) Quality control of their products.
- d) Strong order book and established financial track record of delivering growth.
- e) Experienced board and senior management team.
- Continue to invest in infrastructure
- Focus on R&D
- Developing new products
- Provide their product offerings to the international market
Objects of the Issue:
The objects of the Offer are:
- To carry out the disinvestment of 22.45 Mn Equity Shares by the Selling Shareholder.
- To achieve the benefits of listing the Equity Shares on the Stock Exchanges.
Financial of the issue
At the higher end of the price band, Bharat Dynamics is valued at 16x FY17EPS, a significant discount to Bharat Electronics (which trades at 25xFY17EPS). Both companies are in similar sector and are Government owned companies.
To find more about the issue and the company, visit Bharat Dynamic.
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