Harsha Engineers IPO Opens This Week: The initial public offering (IPO) of Ahmedabad-based Harsha Engineers International will open for subscription on September 14 and conclude on September 16. The precision bearing cage manufacturer’s public issue consists of a fresh issue of equity shares aggregating to Rs 455 crore and an offer-for-sale (OFS) of up to Rs 300 crore by existing shareholders.
As a part of the OFS, Rajendra Shah, Harish Rangwala, Pilak Shah, Charusheela Rangwala and Nirmala Shah will offload shares.
Harsha Engineers IPO: Price Band
Harsha Engineers has fixed the IPO price band at Rs 314-330 per share for the Rs 755 crore initial share offer. Half of the issue size has been reserved for qualified institutional investors, 35 per cent for retail investors and the remaining 15 per cent for non-institutional investors.
Harsha Engineers IPO: Objective
Proceeds from the fresh issue of the Harsha Engineers IPO to the tune of up to Rs 270 crore will be utilised for debt payment, up to Rs 76 crore for funding working capital requirements towards the purchase of machinery, up to Rs 7.12 crore for infrastructure repairs and renovation of the existing production facilities and for general corporate proposes.
Harsha Engineers IPO: Financials
Harsha Engineers’ revenue from operations increased by 51.24 per cent to Rs 1,321.48 crore for fiscal 2022, from Rs 873.75 crore for fiscal 2021, while profit after tax doubled to Rs 91.94 crore for fiscal 2022, from Rs 45.44 crore for fiscal 2021. Axis Capital, Equirus Capital, and JM Financial are the book-running lead managers to the issue.
Harsha Engineering was founded by Rajendra Shah and Harish Rangwala in 1986. The promoters hold 99.7 percent of the company’s equity. It offers a diverse suite of precision engineering products across geographies and end-user industries, including automotive, aviation and aerospace, railways, construction, mining, renewable energy, agriculture and other industrial sectors, the DRHP said. Harsha Engineers International has five manufacturing facilities with two of its principal manufacturing facilities at Changodar and one at Moraiya, near Ahmedabad in Gujarat in India, and one manufacturing unit each at Changshu, China and Ghimbav Brasov in Romania, which allow access to its customers in over 25 countries.
Harsha Engineers IPO: GMP Today
As per market observers, Harsha Engineers shares’ premium (GMP) has risen to Rs 220 in the grey market today from yesterday’s Rs 200.
Should you Invest?
At the higher price band of Rs 330, the company “is valued at 27.7x FY22 earnings”, which in our view is reasonable compared to its peers. Harsha Engineers, with its strong market share in precision bearing cages and being one of the leading players globally, provides healthy return ratios and visibility going ahead, said LKP Research.
“We recommend investors to ‘Subscribe’ to the IPO,” it added.
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