What you must know Mason Infratech IPO?

About Mason Infratech Ltd

Mason Infratech Ltd was incorporated in the year 2020; as a real estate construction company providing construction services for residential and commercial buildings. Among other things, this also includes new and redevelopment projects.  Mason Infratech Ltd offers comprehensive and end-to-end construction services for residential, corporate, and commercial buildings. The principal area of operation of the company is in the Mumbai Metropolitan Area (MMA). The company also received the Corporate Excellence Award in 2022 for being the Fastest Growing Construction Company as selected by Brand Connect Network Private Ltd. The company has 141 skilled staff members and in addition, it also uses a number of contract labourers for various jobs to support its projects.

Highlights of the Mason Infratech IPO

Here are some of the highlights of the Mason Infratech IPO on the SME segment of the National Stock Exchange (NSE):

•    The issue opens for subscription on 24th June 2024 and closes for subscription on 26th June 2024; both days inclusive.

•    The stock of the company has a face value of ₹10 per share and it is a book built issue. The book building price band for the IPO has been set in the range of ₹62 per share to ₹64 per share. Being a book built IPO, the final price discovery will happen in the above price band only.

•    The IPO of Mason Infratech Ltd has only a fresh issue component and no offer for sale (OFS) portion. While the fresh issue portion is EPS dilutive and equity dilutive, the OFS is just a transfer of ownership and  hence is not EPS or equity dilutive.

•    As part of the fresh issue portion of the IPO, Mason Infratech Ltd will issue a total of 47,60,000 shares (47.60 lakh shares), which at the upper band IPO price of ₹64 per share aggregates to fresh fund raising of ₹30.46 crore.

•    Since there is no OFS, the fresh issue size will also double as the overall issue. Therefore, the overall IPO size will also comprise of the issue of 47,60,000 shares (47.60 lakh shares) which at the upper band IPO price of ₹64 per share aggregates to overall IPO size of ₹30.46 crore.

•    Like every SME IPO, this issue also has a market making portion. The company is yet to finalize its market maker and the exact market maker quota, although it is normally around 5% or more of the total issue size. The market maker provides two-way quotes to ensure liquidity on the counter and low basis costs.

•    The company has been promoted by Asit Thakkar Dattani, Ashutosh Juthani and Smeet Thakkar Dattani. The promoter holding in the company currently stands at 98.20%. However, post the fresh issue of shares, promoter equity holding share will get diluted to 71.60%.

•    The fresh issue funds will be used by the company for meeting its ongoing working capital needs of the business. A small part of the IPO proceeds are set aside for general corporate purposes.

•    Expert Global Consultants Private Ltd will be the lead manager to the issue, and KFIN Technologies Ltd will be the registrar to the issue. The market maker for the issue is yet to be announced by the company.

The IPO of Mason Infratech Ltd will be listed on the SME IPO segment of the NSE.

Mason Infratech IPO – Key Dates

The SME IPO of Mason Infratech IPO opens on Monday, 24th June 2024 and closes on Wednesday, 26th June 2024. The Mason Infratech Ltd IPO bid date is from 24th June 2024 at 10.00 AM to 26th June 2024 at 5.00 PM. The Cut-off time for UPI Mandate confirmation is 7.00 PM on the issue closing day; which is 26th June 2024.

It must be noted that in ASBA applications, there is no refund concept. The total application amount is blocked under the ASBA (applications supported by blocked amounts) system. Once the allotment is finalized, only the amount is debited to the extent of the allotment made and the lien on the balance amount is automatically released in the bank account. The credit of shares to the demat account on June 28th 2024, will be visible to investors under the ISIN Code – (INE0SH001010). This allocation to the demat account is only applicable to the extent of the allocation of shares and if no allocations are made in the IPO, then no credit would be visible in the demat account.

IPO Allocation and Minimum Investment Lot Size

Mason Infratech Ltd will have a market maker allocation of shares, which will be used as inventory for market making. The name of the market maker and the actual size of the market making inventory will be announced separately. The net offer (net of market maker allocation) will be divided between the retail investors and the HNI / NII investors. The breakdown of the overall Mason Infratech IPO in terms of allocation to various categories are captured below:

Data Source: Company RHP

The minimum lot size for the IPO investment will be 2,000 shares. Thus, retail investors can invest a minimum of ₹1,28,000 (2,000 x ₹64 per share) in the IPO. That is also the maximum that the retail investors can invest in the IPO. HNI / NII investors can invest a minimum of 2 lots comprising of 4,000 shares and having a minimum lot value of ₹2,56,000. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. The table below captures the break-up of lot sizes for different categories.

There are no upper limits for investments by HNIs / NIIs in the IPO of Mason Infratech Ltd.

Financial highlights: Mason Infratech Ltd

The table below captures the key financials of Mason Infratech Ltd for the last 3 completed financial years. 

Data Source: Company RHP filed with SEBI

Here are some of the key takeaways from the financials of the company for the last 3 years; i.e., from FY21 to FY23, being the latest year. 

•    The revenues over the last 3 years have grown at a very robust clip, with FY23 revenues nearly 18 times the revenues in FY21. As net profit traction has picked up in the last 2 years, the net profit margins have improved from 2.25% to 5.28% in last 2 years.

•    While net margins of the company have been relatively strong at 5.28%, the margins have also shown growth traction in recent years. In addition, return on equity (ROE) stands robust at 42.10% in FY23, while the return on assets (ROA) is also strong at 8.01% in FY23. Both are up sharply from the previous two years. This can be largely attributed to the low capital and asset base in the business.

•    The asset turnover ratio or the sweating ratio has been very healthy in the latest year at 1.52X and that only gets further accentuated when you look at the healthy ROA.

The company has latest year EPS of ₹2.68, after adjusting for capital actions. The FY23 earnings are being discounted by the IPO price of ₹64 per share at 23-24 times P/E ratio. That looks a tad on the higher side. Howe if you look at the 8-month EPS of ₹2.52 for FY24 and annualized it to full year extrapolated EPS of ₹3.78. On that the valuations in the range of 16-17 times P/E ratio look a lot more reasonable. 

To be fair, Mason Infratech Ltd some bring some intangible advantages to the table. It has a growing customer base and has a customer centric approach to its business. For now, the pricing of the IPO looks very reasonable if you consider the FY24 numbers. Investors can look at the IPO from a longer term perspective and a holding period of at least one year. The investors can bet on the technology focused operations of the company and its ability to generate value in the coming years.


Check Mason Infratech IPO allotment status