Sona Machinery IPO price band announced: Check date, issue size and other key details

Agro-processing equipment manufacturer Sona Machinery Limited has finalised the price band for its initial public offer (IPO) set to open for subscription on Tuesday, March 5.

The company has set the price band in the range of ₹136 to ₹143 per equity share of a face value of ₹ 10 each.

Sona Machinery IPO is a building exercise consisting entirely of a fresh issue of 36,24,000 equity shares including a market maker portion of 1,82,000 shares. There is no offer for sale (OFS) by existing promoters or shareholders of the company.

The public issue will be available for subscription between March 5 and March 7. Shares of Sona Machinery will be listed on the National Stock Exchange's SME platform, NSE Emerge.

Sona Machinery IPO issue size, lot size and minimum investment

Of the total shares available in the Sona Machinery IPO, the company has reserved 50% of the net issue for qualified institutional buyers (QIBs). The portion reserved for non-institutional investors will consist of not less than 15% of the net issue. The remaining 35% of shares in Sona Machinery IPO are kept for retail individual investors.

Retail investors can submit their bids in the IPO with a minimum lot size of 1,000 equity shares, aggregating to ₹1,43,000, and in multiples thereof. The maximum investment amount for retail investors is capped at ₹2 lakh.

High net worth investors can invest in the public issue with a minimum of 2 lots of 1,000 equity shares, aggregating to ₹2,86,000.

The allotment of shares in Sona Machinery IPO is tentatively scheduled to be finalised on March 11. Credit of shares into the demat account of successful bidders is expected to be done on March 12 along with refunds for non-allottees. Shares in Sona Machinery IPO are expected to be listed on NSE Emerge on March 13.

The company intends to raise ₹51.82 crore at the upper price band for the IPO.

The money raised in the Sona Machinery IPO will be utilised for capital expenditure on setting up a new manufacturing facility in Uttar Pradesh's Ghaziabad. A portion of the proceeds will be used for repayment of the company's existing debts, issue-related expenses, and general corporate purposes.

The company has appointed Hem Securities Limited as the sole book-running lead manager and Maashitla Securities Pvt. Ltd as the registrar of the proposed issue. Hem Securities Limited will also serve as the market maker for the Sona Machinery IPO.

Sona Machinery promoters, Vasu Naren and Shweta Baisla, presently hold a 100% stake in the company which will be diluted to 73.59% post the issue.

Incorporated in 2001, Sona Machinery Ltd is engaged in the business of manufacturing agricultural processing machinery. The company offers a full solution that covers engineering, installation, supervision and machine commissioning. Its product portfolio includes grain pre-cleaner machines, rotary drum cleaners, vibro-classifiers, stone separator machines, paddy dehusker machines, husk aspirators and length graders.

Sona Machinery has showcased strong growth in its financial performance over the last three financial years. The company's revenue from operations has grown to ₹80.96 crore in FY23, up from ₹44.51 crore in FY22 and ₹6.04 crore in FY21. The firm's net profit has shot up over 26 times from ₹27,81,000 in FY21. Sona Machinery posted a net profit of ₹7.68 crore in FY23 and ₹3.26 crore in FY22.