Private equity-backed India’s Data Patterns files for IPO
By Vinu Lal
10:04, 22 September 2021
Indian electronic systems and supplier to the defence and aerospace sector Data Patterns has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO), said one of its lead managers.
In a press statement sent to Capital.com, said the company intends to raise INR6bn–7bn ($81m–$94.7m). IIFL Securities Limited and JM Financial Limited are the book-running lead managers to the issue.
The public issue comprises a fresh issue of INR3bn and an offer for sale (OFS) of six million equity shares by the promoter and individual selling shareholders.
The OFS includes a sale of up to 1.97 million shares each from Srinivasagopalan Rangarajan and Rekha Murthy Rangarajan; up to 75,000 from Sudhir Nathan; up to 414,775 equity shares from GK Vasundhara; and up to 1.65 million shares from other existing shareholders.
Debt repayment and pre-IPO placement
The company intends to utilise net proceeds from the fresh issue for repayment of debt and to help fund its working capital expenditure (capex).
It will also used the proceeds to fund an upgrade and expansion of its existing facilities, as well as for general corporate and administrative purposes.
The defence electronics company may consider a pre-IPO placement aggregating for up to INR600m. If such placement is undertaken, the amount raised will be reduced from the fresh issue, according to early papers.
About Data Patterns
Data Patterns is a vertically integrated defence and aerospace electronics solutions provider that supplies system requirements for military activities in space, air, land and sea. Its product portfolio ranges from building blocks to end systems.
Its core competencies include design and development across electronic hardware, software and firmware, and mechanical product prototypes, in addition to completing testing, validation and verification processes.
India spends over INR1trn on defence, which has been growing at a steady pace over the years.
Data Patterns works closely with several government-owned defence firms such as Hindustan Aeronautics Ltd and Bharat Electronics Ltd, as well as government organisations involved in defence and space research. Its order book has grown at an annual growth rate of 40.72% over the past four years, standing at INR5.82bn as of 31 July.
The company is backed by the Blackstone Group’s senior managing director, Matthew Cyriac, through his affiliate firm Florintree Capital Partners LLP, which holds a 12.8% stake in the company.
Operational performance
According to a Frost & Sullivan report quoted in the press statement, between FY2019 and FY2021, the company recorded the highest growth in revenues among key Indian defence and aerospace companies, with a revenue growth of 71% during this period.
For FY21, the company’s revenue from operations was at INR2.26bn against INR1.6bn a year ago.
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