Sona Machinery gears up to launch its IPO

New Delhi: Sona Machinery, a leading agro-processing original equipment manufacturer, has announced the filing of its Draft Red Herring Prospectus (DRHP) with NSE Emerge, the SME platform of the National Stock Exchange of India (NSE).

The IPO comprised a ‘fresh issue’ up to 3,624,000 equity shares with a face value of INR 10 per share on NSE Emerge, the SME platform of the National Stock Exchange of India.

Hem Securities Limited will be the sole book-running manager for the proposed offering, while Maa Shitla Securities Pvt. Ltd will be the registrar to the issue.

In its DRHP, Sona Machinery has outlined the primary purposes for which the capital raised during the IPO will be utilised. The company has plans to set up a new manufacturing unit to expand its operational capabilities and manufacturing output to cater to the ever-rising demand of its products among customers.

Through these measures, Sona Machinery aims to fulfil the growing demand for state-of-the-art Grain-processing equipment across the domestic market in India as well as cater to customers in the key growth regions globally, even as it expands and consolidates its overall market presence. The company also aims to reduce its short-term and long-term financial obligations to be better positioned to capitalise on the favourable headwinds created by the push for domestic manufacturing and in India. The manufacturing sector contributes around 17% of the nation’s GDP – a number that government policies are pushing to increase to 25% by 2025 with progressive policies through SAMARTH Udyog Bharat 4.0 and Ethanol Blended Petroleum (EBP) programme.

For fiscal 2023, Sona generated Revenue from operations of Rs. 80.97 crores growing at CAGR of 266.11% over fiscal 2021 to 2023. The company had EBITDA of Rs. 11.66 crores and EBITDA margin of 14.41%. The company’s profit after tax for fiscal 2023 was Rs. 7.71 crores with PAT margin of 9.52%, growing at CAGR of 423% over Fiscal 2021 to 2023. The company’s return on equity (RoE) and return on capital employed (RoCE) were 102.3% and 80.01% respectively for fiscal 2023.