Harsha Engineers IPO Registration Day 2: Harsha Engineers IPO was fully enrolled on the first day of enrollment. At the tender offer, bids were made for 3,24,61,830 shares against 1,68,63,795 shares in the offering, representing 1.92 times subscription, according to data available with the NSE until 1734 hrs. The public number will be closed on Friday. The applicants should also note that the closing time for UPI mandate acceptance is Friday, September 16, 2022, until 5:00 PM, the last day of IPO bidding. If they do not, their application cannot be processed.
Harsha Engineers IPO: Subscription Status
The retail private investor category received 2.28 subscriptions, while the non-institutional investor quota was subscribed 3.60 times. The category for qualified institutional buyers (QIBs) received 0.05 subscriptions.
Harsha Engineers IPO: Price Band
The price band has been set at Rs 314-330 per share for the first sale of shares. The Harsha Engineers IPO consists of a new share issue totaling Rs 455 crore, and an offer for sale (OFS) of up to Rs 300 crore by existing shareholders. As part of the OFS, Harish Rangwala (up to Rs 75 crore), Rajendra Shah (up to Rs 66.75 crore), Pilak Shah (up to Rs 16.5 crore), Charusheela Rangwala (up to Rs 75 crore) and Nirmala Shah (up to Rs 66.75 crore) shares will unload, according to the information in the red herring prospectus (RHP).
Harsha Engineers IPO: Objective
Proceeds from the new issuance will be used for debt payment, financing of working capital requirements for the purchase of machinery, infrastructure repairs and renovation of the existing manufacturing facilities and for general business proposals.
Harsha Engineers International Ltd is the largest precision bearing cage manufacturer, with a 50-60% market share in the organized market. It offers a diversified range of precision engineering products in different geographies and end-user sectors. It operates under 2 business divisions – engineering business and solar EPC business.
Harsha Engineers IPO: Should You Subscribe?
“In valuation terms, the post-issue P/E comes in at 32.7x FY22 EPS (at the high end of the issue price band). The company’s consolidated PAT grew at a CAGR of 105 percent from FY20-22 as a result of margin expansion. HEIL has a diverse product portfolio and strong expertise; we believe that these positives have yet to be factored into the valuations imposed by the company. So we have a SUBSCRIBE rating for this matter,” said brokerage Angel One.
IIFL Research said in its IPO note: “At the top price range of Rs 330, Harsha Engineers International Limited is demanding a P/E multiple of 20.5X based on FY22 revenue, while the company’s price/sales ratio is 2, 27X of FY22 revenue The industry average PE multiple is 50.98X of FY22 revenue Given 60 percent market share in the organized segment of the Indian bearing cage market, longstanding relationship with customers, expertise in tooling, design development and automation, plans to strengthen technology leadership and focus on increasing operational efficiency, we recommend ‘SUBSCRIBE’ to the issue with a long-term perspective.”
The company has five production facilities with two of its main production facilities in Changodar and one in Moraiya, near Ahmedabad in Gujarat in India, and one production unit each in Changshu, China and Ghimbav Brasov in Romania, providing access to its customers in more than 25 countries.
Axis Capital, Equirus Capital and JM Financial are the book-running lead managers of the offering, while Link Intime India is the registrar of the offering.
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