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business | IST

Paras Defence and Space IPO: Co plans capex for making 'complete' camera systems

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Indigenous developer and manufacturer of defence and space equipment - Paras Defence and Space Tech's IPO opens today with a price band of Rs 165-170 per share for a total size of Rs 170 crore. What will they use the cash raised for and what is the outlook for FY22, Munjal Shah, MD of the company spoke to CNBC-TV18.

Paras Defence and Space Technologies, on Thursday, said that it has fixed a price band of Rs 165-175 for its Rs 171-crore initial share sale. The three-day initial public offering (IPO) will open for subscription on September 21 and conclude on September 23. In an interview with CNBC-TV18, Munjal Shah, MD of the company, spoke about his upcoming plans.
On debt repayment, Shah said, “Our term loan outstanding is only Rs 35 crore, the rest is working capital. Against that working capital, we have a lot of debtors, we have a lot of inventory, we have a lot of stock, we have work in progress so we don't term it as debt. So actual term loan outstanding is only Rs 35 crores and out of that, say from the IPO proceeds we are going to repay around Rs 10 to 12 crore, but in the future, we wish to be debt light.”
The company is engaged in designing, developing, manufacturing and testing a wide range of defence and space engineering products and solutions. Paras Defence and Space Technologies business is highly dependent on projects and programmes undertaken by the Central government and associated entities, such as defence public sector undertakings and government organisations involved in space research.
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On business and capex plans, Shah said, “Paras Defence is like a one-stop solution for anything and everything in defence. It is like a department store. You come here, whether you want mechanical, optical, electronics, you get whatever you want; this is the base that we have created. So, you don't have to go to multiple shops, it is like a one-stop solution. The capex is going to be for making complete camera systems for defence, for the commercial market and also for space.”
On revenues, he said, “Most of the defence business has been done by government organisations and today, we are proud to say that we are working with each and every government organisation, you name the organisation and mostly they are our customers. So, we have about 50 percent plus business but also, we have our exports. Export business constitutes 15 percent on an average for the last several years. We have been doing exports for last several years, double-digits consistently and also now, with more and more ‘Make in India’ privatisation, indigenisation, we cater to private customers also.”
For full management commentary, watch the video.