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Mergers and acquisitions (M&A) are common strategies used by companies to expand their operations, enter new markets, or acquire new technology. While these transactions can create significant value, they also have a profound effect on stock prices. 

1. Positive Effects on Stock Prices

In many cases, the stock price of the target company (the company being acquired) rises after the announcement of a merger or acquisition. This increase is due to several factors:

• Premium Offered: The acquiring company often offers a premium above the current stock price to gain control, which drives the target company's stock price higher.
• Investor Optimism: Mergers and acquisitions can lead to operational synergies, cost reductions, or market expansion, which investors view as beneficial for the target company.

Example: In 2018, Walmart acquired a 77% stake in Flipkart. While Flipkart was a private company, the acquisition generated significant interest in related companies like Info Edge (which had investments in Flipkart). The positive sentiment around the acquisition caused a temporary rise in Info Edge's stock.

2. Effect on the Acquiring Company’s Stock Price

The impact on the acquiring company’s stock price is often less straightforward and can vary:

• Initial Drop: In some cases, the stock price of the acquiring company might drop. This could happen due to concerns about overpayment for the target company, integration challenges, or the assumption of debt.
• Long-Term Growth: If the acquisition is successful and leads to increased revenues or cost efficiencies, the acquiring company’s stock price can rise in the long term.

Example: When HDFC Bank acquired Centurion Bank of Punjab in 2008, there was a short-term drop in HDFC’s stock due to concerns over the valuation. However, over time, HDFC benefited from the expanded customer base and market share, leading to a positive impact on its stock.

3. Synergy and Its Impact on Stocks

Mergers are often driven by the expectation of synergies – the idea that the combined company will be more valuable than the sum of the two individual companies. These synergies can result in cost savings, enhanced revenue, or greater market power, which, in turn, can boost stock prices.

Example: The merger of Idea Cellular and Vodafone India in 2018 aimed to create the largest telecom operator in India, with synergies in network infrastructure and customer base. While initial integration challenges caused a decline in stock prices for both companies, the long-term expectation was that the combined entity would become more competitive.

4. Regulatory and Market Reactions

The stock market closely monitors regulatory approvals in M&A deals. If a merger faces legal or regulatory hurdles, it may lead to uncertainty and a drop in stock prices. Conversely, regulatory clearance often leads to a rise in stock prices due to increased confidence in the deal.

Example: When Sun Pharma announced its acquisition of Ranbaxy in 2014, regulatory scrutiny by Indian authorities and international regulators caused fluctuations in stock prices for both companies. After the deal was cleared, Sun Pharma’s stock price showed stability.

5. Hostile Takeovers

In a hostile takeover, the acquiring company attempts to purchase a controlling stake in the target company without the approval of the target’s management. This can lead to volatility in the target company’s stock price, as speculation about the deal drives trading activity.

Example: In 2017, L&T initiated a hostile takeover of Mindtree. The stock prices of both companies fluctuated during the process, with Mindtree’s stock rising significantly due to the takeover premium.

6. Long-Term Impact on Stock Prices

While stock prices often react immediately to M&A announcements, the long-term impact depends on how well the companies integrate and achieve their strategic objectives. Factors like cultural alignment, successful integration of operations, and realization of synergies can influence the long-term stock performance of both the target and acquiring companies.

Example: The 2007 acquisition of Corus by Tata Steel initially led to excitement in the stock market, but the long-term impact was less favorable due to global economic downturns and integration challenges, causing Tata Steel’s stock price to decline in the following years.

Conclusion

Mergers and acquisitions have a significant impact on stock prices, both in the short and long term. While target companies generally experience a rise in stock prices, the acquiring company's stock can be affected by various factors such as deal structure, investor sentiment, and regulatory approvals.

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Introduction

Beginners who want to build wealth from the stock market hesitate to take the first step towards stock market trading because the fear of losing money stops them from entering into it.

Stock Trading as the name suggests is a trading method where people are involved in the transaction of shares of different companies in the stock market.

You may feel surprised to know that investing in the stock market with limited funds actually helps you double your wealth.

Trading stocks can seem challenging, especially if you have limited funds. However, with the right strategies and tools, even small investors can maximize their potential returns. One such tool is margin trading. Margin trading allows you to borrow money from your broker to buy more stocks than you could with just your available cash. This blog will guide you on how to trade stocks with limited funds using the margin trading facility, providing you with tips and tricks to get started.

A small investment with a regular amount will give you a wide experience of trading in the stock market. You only need to take care of a few things:

1) Set a Goal

An investment whether it is small or big has a specific reason to invest. Hence, many stock analysts advise you to set a goal before getting into the stock market as, without a clear objective, one can never achieve desired wealth.

Secondly, the goal of achieving outstanding returns, helps you decide the type, tenure and risk appetite. If you are a beginner, it is suggested to invest in the long run. This is because long term investment gives you ample opportunity to earn knowledge of the stock market. Also, setting a goal lowers the chances of investment errors.

Equity trading investment gives you a steady return if you invest in the stocks for the long term.

2) Control Your Emotions

Excessive emotions can harm your investment amount. Hence it is suggested to control your emotions while doing stock trading. Positive stock trading returns make people happy, however, negative returns like losses make people unhappy and that’s why many people stop investing.

3) Focus on the Fundamentals

Successful investments can be done only if investors have an in-depth understanding of the stock market. You can invest and earn a potential return from the stock market only if you focus on the fundamentals of the stock market and keep a track of every stock market movement. You can do this by doing proper stock market research. Having adequate knowledge of the stock market can mitigate your stock market risks.

4) Diversification

One of the best investment strategies to mitigate the risks is diversification. It allows investors to divide the investment amount into different investment categories along with their risks. Diversification of the money into different stocks will help you balance your portfolio as if one stock underperforms, the other performs well.

Best Way to Trade Without the Fear of Limited Funds

Margin Trading

Margin trading provides you with a way to purchase stocks that you can’t afford. Here, you need to borrow some amount of money from the stockbroker. In margin trading, the margin is being paid in both cash and in shares.

It is a prominent feature in stock trading as it allows investors to take larger portions and uplift their returns to another level. Here, the stockbroker plays a pivotal role as it funds your margin trading transactions.

In other words:

Margin trading involves borrowing money from your broker to purchase stocks. Here's how it works:

• Leverage: Margin trading provides leverage, meaning you can control a larger amount of stock than you could with your own money. For example, if you have ₹10,000 and your broker offers 2:1 leverage, you can buy ₹20,000 worth of stocks.
• Interest: You pay interest on the borrowed amount. This interest is charged by your broker.

Set a Clear Goal

Before you begin margin trading, set a clear financial goal. Ask yourself why you want to use margin trading. Are you looking to increase your returns over a short period, or are you investing for long-term growth? Having a goal helps you stay focused and make smart decisions.

Educate Yourself

Understanding the basics of margin trading is crucial. Learn about the following:

• Initial Margin: The amount of money you need to deposit to start margin trading.
• Maintenance Margin: The minimum account balance you must maintain. If your account balance falls below this, you'll get a margin call from your broker asking you to deposit more funds.
• Margin Call: A demand from your broker to deposit additional money or securities into your margin account when it falls below the maintenance margin.

Start Small

Begin with a small amount that you can afford to lose. Margin trading amplifies both gains and losses, so it's important to start cautiously. This way, you can learn and make mistakes without significant financial impact.

Choose the Right Broker

Select a brokerage firm that offers favorable margin trading terms. Look for brokers with:

• Low Interest Rates: Since you'll be paying interest on the borrowed amount, lower rates mean lower costs. Swastika Investmart offers competitive interest rates, making margin trading more affordable for you.
• Educational Resources: Brokers that provide tutorials, articles, and support can help you understand margin trading better. Swastika Investmart excels in this area, offering a wealth of educational and personalized support to ensure you make best trading decisions.

By choosing Swastika Investmart, you can benefit from low costs and exceptional resources, setting you on the path to successful margin trading.

Control Your Emotions

The stock market can be unpredictable, and prices can fluctuate significantly. Stay calm and avoid letting emotions drive your investment decisions. Stick to your strategy and remain focused on your long-term goals.

Monitor Your Investments

Regularly review your investment portfolio to ensure it aligns with your goals. Keep track of the performance of your stocks and make adjustments if necessary. However, avoid checking your portfolio too frequently, as short-term fluctuations can be misleading.

Be Aware of Risks

Margin trading comes with significant risks. Here are a few to keep in mind:

• Magnified Losses: While margin trading can amplify returns, it can also magnify losses. You can end up losing more money than your initial investment.
• Margin Calls: If your account balance falls below the maintenance margin, you'll need to deposit additional funds to avoid your broker selling your securities at a loss.
• Interest Costs: The interest on the borrowed amount can add up, especially if you hold the stocks for a long time. Ensure that the potential returns outweigh these costs.

Best Practices for Margin Trading

• Invest Wisely: Be cautious and ensure you have enough funds to cover potential losses.
• Borrow Less Than the Allowed Limit: Start with a smaller amount and increase your borrowing gradually as you become more comfortable with margin trading.
• Stay Informed: Keep up with market trends and news that may affect your investments.

The Process to Start Margin Trading.

The first and foremost step towards margin trading is to place a request to the stockbroker so that it can open a margin trading facility account. After opening the margin trading facility account, the stockbroker maintains a minimum balance which is called minimum margin.

Before getting started into a trade, investors are required to deposit a fixed per cent of the whole traded amount and the rest of the amount will be funded by the stockbroker.

Please note that the interest rate is charged by the stock broker.

The margin can be settled later when all the positions are squared off.

In margin trading, the profit can be counted only if you earn a profit that is higher than the margin, otherwise, you will suffer from a huge loss.

Takeaway

The amount of money cannot act as a limitation for investing in the stock market. A strong goal with the right decision can help you achieve great wealth. You are only required to Open Demat Account with a reputed brokerage firm like Swastika and you are ready to go. With Swastika’s Demat account, you can start an investment journey with a little money.

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A new variant of COVID 19 has been identified which was named Omicron by the World Health Organization (WHO). Many share trading analysts suggested that this new variant tends to spread quicker than the Delta variant and is much more infectious than other COVID variants.

Also, they said that the vaccines available now are less effective against this new variant. As we are trying to recover from the second wave, this omicron variant caused precariousness in the market.

If we talk about the current week, then we will get to know that the GDP for the July-Sept quarter of FY 2022 showed a total growth of 8.4%, which is the fourth consecutive quarter of positive growth post the major contraction.

If India wants to remain in the position of the fastest-growing economy in the year 2023, all restrictions are lifted and the growth continues to rise.

As said above, if the new strain emerges again, the government will take the necessary steps to bring back the restrictions.

Government’s 257 Billion Rupees Boost for EV - Your Chance for Potentially Wild Profits

Recently the government has announced that it will invest Rs 257 Billion into the electric vehicle initiatives by the year 2025.

The pandemic has acted as a catalyst of a positive change to shape the healthcare sector across the world.

Here are some of the potential stocks you need to pay attention to in India as the new variant of concern spreads.

Cipla

Its product portfolio contains generics and medications in key helpful fragments.

In India, Cipla is one of the biggest pharma organizations and the biggest Indian exporter to developing business sectors.

During the pandemic, Cipla carried out 7 products as a piece of their Covid-19 portfolio. These incorporate medications, sanitisers, and antigen and counter antibody testing kits.

During the sensitive days of the pandemic, it went into various associations to advertise items in oncology, biosimilars, and metabolic illnesses.

Cipla saw a solid 12% year on year (YoY) development in income in the monetary year 2021 predominantly due to respiratory opening in the US and their Covid portfolio.

During a similar period, Cipla's (EBITDA) margin grew by more than 350 basis points to 22.5% from 18.9%. Lower expenses because of cost enhancement drives and lower on-ground activities because of lockdown prompted extension in margins.

The organization's net overall revenue remained at a notable high of 12.6% in FY 2021 against 9% in the monetary year 2020. Operational efficiency and lower finance costs because of prepayment of debt have prompted higher net margins

During the year, the company launched 9 abbreviated new drug applications (ANDA), filed for 8 ANDAs out of which it has received approval for the 7 ANDAs.

Alkem Laboratories

Alkem Laboratories is a multinational pharmaceutical company that primarily manufactures and sells pharmaceutical generics, nutraceuticals, in India and globally.

As per the sources, Alkem is considered the fifth largest Indian pharmaceutical company in terms of market share. As of now, the company has manufactured 20 facilities and 6 R&D facilities in India and US.

The company has more than 800 brands out of which 12 brands have annual sales of more than Rs 1 billion.

During the pandemic, the company’s operations were little affected. However, it saw a full recovery during the whole phase.

In 2021, the company’s total revenue grew up to 6.2% in FY 2021, which was 13.4% in the previous year.

Furthermore, the company has also experienced a drop in sales, which might affect the company’s growth. However, the company managed to recover as the sales growth was primarily supported by their international business.

The EBITDA margin for FY 2021 is 21.9%, which has grown from 17.72% from the last year.

Thyrocare Technologies

Thyrocare Technologies is an Indian multinational chain of diagnostic and preventive care technologies that are known for offering more than 279 tests and 79 profiles of tests to detect several disorders.

The company has a centralized processing laboratory where it fulfills the requirement of the customers. The company also operates regional processing laboratories in metro cities to ensure speedy processing.

Thyrocare has a network across India as it supports a logistic network and IT infrastructure.

The company further declared a revenue growth of 14% in FY 2021 because of an increase in the diagnostic revenue due to COVID 19 testing.

Dr Lal Pathlabs

Dr Lal Pathlabs is an international service provider and one of the top diagnostic chains in India. The company is located in Delhi.

It offers more than 5000 diagnostic tests, related healthcare tests and services across 3,705 centres.

During the lockdown, the company extended its reach digitally and physically to improve its covid testing.

The revenue of Dr Lal path labs grew by 18% in FY 2021 against a 10.6% growth in the financial year 2020.

The EBITDA of the year 2021 was marked at 29.3% as compared to the last year which was 27.5% in the last financial year.

The Bottom Line

The healthcare industry remains resilient even in the pandemic. However, the companies have also gone through losses but due to the demand for healthcare and antibiotics, these companies have managed to perform better than others.

Other sectors such as FMCGs, and eCommerce companies could also do the same.

The pandemic has completely changed business ethics and the way of doing business.

If you want to invest in good companies, pay attention to those companies that can leverage the changes happening in the economy and push their long term growth terms.

It is suggested to not try to time the market. Instead, invest in the companies that give you better stock market trading returns in the long term.

The SME-IPO boom is still on fire. This year many companies have gone public and many are in the queue. As the year comes to an end, the list of companies going public is not in a mood to take a pause.

Even at the year-end, seven companies claimed to conduct the IPOs in the next 10-15 days, intending to raise more than Rs 19 000 Crore.

The IPO of star health has already come in the first week of December, while the IPOs of the tech companies like Rate Gain Technologies, Anand Rathi Wealth and CE Info Systems will begin in the next week.

The IPOs of Adani Wilmer and Go First Airlines are expected to open for the subscription in the third or fourth week of December.

While the subscription of Tega Industries has already begun and as per the sources, the IPO of the same subscribed 14 times on Day 2.

Adani Wilmer, the maker of Fortune Edible Oil, has already filed DRHP to the stock market regulator organization and the issue is expected to open by December 15. Newly issued shares up to Rs 4500 Crores will be sold by the organization.

The company nearly spends Rs 1900 Crore on the capital investment, Rs 50 Crore on the strategic acquisition and general corporate purposes from the proceeds.

Let’s take a glance at the following companies:

Star Health and Allied Insurance

Star health and allied insurance is an Indian health insurance company located in Chennai. The company offer services in a different segment of health such as personal accident, overseas travel insurance, either directly or through other methods like agents, brokers and online.

Rate Gain Technologies

Rate Gain technologies is a software as a service company that mainly provide services to a wide range of verticles in the travel and hospitality industry.

The services include hotels, airlines, online travel agents, vacation rentals, metasearch companies rail, travel management companies and more.

Also, the organization offers inter-connected products that are equipped for taking revenue creation value chain for their customers by utilizing large information capacities and coordination with other innovation stages to acquire more guests, retain them via personalized guest experiences and seek to maximize their margins.

Anand Rathi Wealth

Anand Rathi is considered India’s leading full-service financial services firm that offers several services such as Wealth Management, Investment Banking, Brokerage and Distribution, Corporate Finance and Advisory and more.

As soon as the IPO of the company has launched, it saw an outstanding response from the investors because the issue was fully subscribed on the first day itself.

The issue received approximately 10 times bids as per the date of NSE. investors bid for 8,29,21,509 equity shares and the total offering was 84,75,000 shares. Initially, the company is selling its shares in the range of Rs 530 - 550.

Go First Airlines

GO First Airlines is Indian’s first ultra-low-cost airline, headquartered in Mumbai. As of October 2017, the company was the fifth-largest airline in India with a market share of 8.4%.

Go Air began its operations using an Airbus A320 and worked its first departure from Mumbai to Ahmedabad on 4 November 2005.

CE Info Systems

CE Info Systems aka Mapmyindia is the main service provider of cutting edges digital technologies such as digital maps, geospatial software and location-based IOT technologies in India.

It is a data & technology company offering exclusive digital maps as a service (MaaS), PAAS (Platform as a service) and Software as a Service SAAS.

Getting Ready to March In

As per sources, investors of Adani Enterprises, the parent organization of Adani Wilmar, will probably get a 10% decrease in the IPO cost.

CE Info Systems, which possesses MapmyIndia, will dispatch a public offering one week from now to produce generally Rs 1,400 crore.

Promoters and other existing investors, including Qualcomm Asia Pacific, are selling the whole 7.55 million shares on sale.

The organization gives SAAS and stage as help for its digital maps. Its map covers cover 750,000 towns, more than 7,500 towns on a road by-road premise, and 6.3 million kilometers of the road network.

सोने की कीमतों में पिछले सप्ताह दबाव रहा लेकिन कई राज्यों में ओमीक्रॉन वायरस के कारण शुरू हुई सख्ती से इसके भाव सपोर्ट लेते दिखे है। जबकि पिछले सप्ताह में चांदी के भाव में हल्की तेज़ी दर्ज की गई है जो इस सप्ताह के लिए सोने और चांदी के भाव के लिए तेज़ी के संकेत है। क्रिसमस छुट्टियों के कारण सोने और चांदी के भाव अभी सीमित दायरे में बने होने के साथ अस्थिर भी है जिसमे स्थिरता के बाद तेज़ी आ सकती है।

ओमीक्रॉन के मामले अब यूरोप के बाद भारत और अन्य एशिया देशो में बढ़ने लगे है जिसके कारण आर्थिक गतिविधियों में रुकावटें शुरू हो सकती है जो सोने और चांदी में निवेश के लिए सेफ हेवन मांग को बढ़ा सकते है। डॉलर जो सोने के विपरीत दिशा में चलता है, पिछले सप्ताह नरमी रही। अध्ययन से यह भी पता चला है कि ओमाइक्रोन संक्रमण से अस्पताल में भर्ती होने की संभावना कम है, लेकिन यह भी कहा गया है कि इसके संक्रामक होने के कारण गंभीर मामले अभी भी महत्वपूर्ण संख्या में उत्पन्न हो सकते हैं।

नवीनतम कोविड-19 के प्रकोप को रोकने के लिए चीन ने गुरुवार को शीआन शहर को बंद कर दिया ताकि पश्चिमी शहरों में वायरस को फैलने से रोका जा सके। शहर के 130 करोड़ निवासियों को अपने घरों में रहने और ज़रूरतों के लिए हर दूसरे दिन एक व्यक्ति को बाहर जाने के लिए कहा गया है। चीन का यह लॉकडाउन 2020 की शुरुआत की महामारी के बाद से सबसे बड़ा है।

पिछले सप्ताह अमेरिका से जारी होने वाले कोर पीसीई प्राइस इंडेक्स, बेरोज़गारी के दावे  और घरो की बिक्री के आकड़ो से कीमती धातुओं को सपोर्ट मिला है। कॉमेक्स वायदा सोना पिछले सप्ताह 6 डॉलर तेज़ होकर 1810 डॉलर प्रति औंस के स्तरों पर पहुंच गया है। कॉमेक्स वायदा चांदी भी 50 सेंट मजबूत होकर 22.90 डॉलर के स्तरों पर रही।

तकनिकी विश्लेषण

इस सप्ताह सोने और चांदी के भाव सकारात्मक दायरे में रह सकते है।  सोने में 47800 रुपये पर सपोर्ट और 49000 रुपये पर प्रतिरोध है। चांदी में 61000 रुपये पर सपोर्ट और 63500 रुपये पर प्रतिरोध है।

RatingSUSBCRIBE Issue OfferIssue Opens onDec 14, 2021Issue Close onDec 16, 2021Total IPO size (cr)588.22Fresh issue (cr)240.00Offer For Sale (cr)348.22Price Band (INR)555-585Market Lot25Face Value (INR)2Retail Allocation35%Listing OnNSE, BSEObjects of the issue ⮚ For Repayment of borrowings ⮚ For Funding working capital requirementIssue Break-up (%)QIB Portion 50NIB Portion 15Retail Portion ⮚ 35Shareholding (No. of Shares)Pre Issue 47,784,086Post Issue 51,886,650Indicative TimetableFinalisation of Basis of Allotment 21-12-2021Refunds/Unblocking ASBA Fund 22-12-2021Credit of equity shares to DP A/c 23-12-2021Trading commences 24-12-2021

Established in 1985, Data Patterns is a defence and aerospace electronics solutions provider specializing in indigenously designed defence equipment. The firm provides equipment for all types of defence and aerospace systems, including space, air, land, and sea.

Electronic hardware design and development, software and firmware design and development, mechanical design and development, product prototype design and development, functional testing and validation, environment testing and verification, and engineering services opportunities are among the company's core competencies.

⮚ It was one of the fastest-growing firms in terms of revenues among significant Indian defence and aerospace companies between Fiscal 2019 and Fiscal 2021, according to the Company Commissioned  F&S Report, with a revenue increase of 71%.

⮚ The company's strengths throughout the gamut of defence and aerospace electronics solutions from design to delivery give it a  considerable competitive edge in terms of overall development time and cost, as well as competitive pricing when bidding on defence and aerospace contracts.

⮚ The company has design capabilities across the entire spectrum of strategic defence and aerospace electronics solutions including processors, power, radio frequencies (“RF”) and microwave,  embedded software and firmware and mechanical engineering.

⮚ The company is upgrading and expanding its facility, with a  proposed doubling of available floor area and manufacturing capacity, as well as the addition of large and heavy equipment handling capability, large radar and mobile electronic warfare system integration, and a satellite integration facility. Its testing capabilities are also proposed to be further strengthened.

Outlook & Valuation:

In the last 3 years, the company has shown strong growth in revenue where it grew at a CAGR of 19% from Rs 132.50 cr to Rs 226.55 cr over the period of FY19 to FY21, during the same period profit has grown at a CAGR of 97% from Rs 7.70 cr in FY19 to  Rs 54.6 cr in FY21. The margins of the company are also expanding.

As part of the 'Make in India' initiative, the company will bid on bigger,  more challenging contracts. Data Patterns increased its net profitability by approximately 158% between FY20 and FY21.

We believe that the company has enormous potential to grow rapidly thanks to the government's focus on Defense and Aerospace. The IPO is priced at a  49x PE and 13x P/BV to its FY21 earnings at an upper price band of Rs  585. Attractiveness in the defence sector is likely to boost sentiment for the IPO.

IPO Note

DATA PATTERNS (INDIA) LIMITED

KEY MANAGERIAL PERSONNEL

⮚ Srinivasagopalan Rangarajan is the Chairman and Managing Director of the Company. He has been associated with the Company since its incorporation. He holds a Bachelor’s Degree of Technology in Chemical Engineering and he has over three decades of experience in business development, corporate affairs, finance and marketing.

⮚ Venkata Subramanian Venkatachalam is the Chief Financial Officer of the Company. He is a fellow member of the  Institute of the Chartered Accountants of India. He has over two decades of experience in the finance sector.

⮚ Manvi Bhasin is the Company Secretary and Compliance Officer of the Company. She is an associate of the  Institute of the Company Secretaries of India. She has three years of experience in legal and secretarial matters.

⮚ Vijay Ananth K is the Chief Operating Officer and Chief Information Security Officer of the Company. He has more than two decades of experience in software engineering and product management.

⮚ Desinguraja Parthasarathy is the Chief Technical Officer of the Company. He has 32 years of experience in  Product Development.

⮚ Thomas Mathuram Susikaran is the Senior Vice President-Business Development. He holds a bachelor’s degree in engineering. He has over 21 years of experience in business development and marketing.

⮚ Nandaki Devi Ramachandracharya is the Deputy General Manager and Management Representative Quality  Management System. She has 22 years of experience in test engineering.

COMPETITIVE STRENGTHS

⮚ Integrated and strategic defence and aerospace electronics solutions provider based in India, well-positioned to profit from the Make in India initiative.

⮚ Innovation focused business model.

⮚ Sound order book with orders from several prestigious customers in the Indian defence ecosystem. ⮚ The modern certified manufacturing facility of international standards.

⮚ Track record of profitable growth.

⮚ The experienced management team and skilled workforce.

KEY STRATEGIES

⮚ Continue expansion of product portfolio with complex technology-based products.

⮚ Focus on repeat large volume production orders.

⮚ Improving manufacturing infrastructure and enhancing design and development capabilities

⮚ Augmenting the design and development capabilities and expanding manufacturing infrastructure

⮚ Focus on increasing revenues by leveraging core competencies and growing the services business

⮚ Focus on increasing export business

KEY CONCERNS

⮚ The company depends on a limited number of customers for major business.

⮚ Subject to strict quality requirements, customer inspections and audits, and any failure to comply with quality  standards may lead to cancellation of existing and future orders

⮚ Failure to qualify for or win bids could have an adverse effect on its business.

⮚ If it does not maintain its technical information and processes discreet, it may lose its competitive advantage.

⮚ The company has significant working capital requirements.

IPO Note

DATA PATTERNS (INDIA) LIMITED

COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2021)

Name of the Company EPS (Basic) NAV P/E Operational Rev (cr) RoNW Data Patterns (India) Ltd 11.89 44.38 49 223.95 26.79% Peer Group MTAR Technologies Ltd 16.99 154.99 83.56 246.43 9.66%Astra Microwave Products Ltd 3.33 64.51 51.28 640.91 5.16%Centum Electronics Ltd 13.31 173.14 34.90 817.43 5.40%Bharat Electronics Ltd 8.62 45.39 23.49 14,108.69 18.99%

FINANCIALS (RESTATED CONSOLIDATED)

Particulars (Rs. In Millions) FY 2021 FY 2020 FY 2019Equity Share Capital 17.00 17.00 17.00Other Equity 2060.70 1517.95 1311.93Net Worth 2077.70 1534.95 1328.93Total Borrowings 332.21 605.66 601.33Revenue from Operations 2239.50 1560.98 1310.63EBITDA 945.88 472.50 269.93Profit Before Tax 745.34 284.29 103.59Net Profit for the year 555.71 210.48 77.02