Harsha Engineers IPO opens tomorrow: The upcoming IPO (IPO) of Ahmedabad-based Harsha Engineers International will open for subscription on September 14 and close on September 16. The public issuance of the precision bearing manufacturer 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.
Harsha Engineers IPO: Price Band
The Harsha Engineers IPO has a fixed price range of Rs 314-330 per share for the initial share offering of Rs 755 crore. Half of the issue size is reserved for qualified institutional investors, 35 percent for retail investors and the remaining 15 percent for non-institutional investors. Investors can bid on a minimum of 45 shares and then in multiples of 45 shares.
Harsha Engineers IPO: Objective
The proceeds from the new issuance of Harsha Engineers IPO amounting to Rs 270 crore will be used for debt payment, up to Rs 76 crore to finance working capital requirements for the purchase of machinery, up to Rs 7.12 crore for infrastructure repairs and renovation of the existing production facilities and for general business proposals.
Harsha Engineers has an unrelated solar business of EPC that has merged with the company as part of a reorganization. Any incremental investment in the EPC solar business could dilute the company’s mixed margin. The company’s turnover is highly dependent on a few large customers. Any adverse development or significant reduction in the revenue of these customers could adversely affect Harsha’s financial condition.
Harsha Engineers IPO: Financials
Harsha Engineers revenue from operations increased 51.24 percent to Rs 1,321.48 crore for fiscal 2022, from Rs 873.75 crore for fiscal 2021, while the after-tax profit 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 of the matter.
Harsha Engineers IPO: GMP Today
According to market observers, the shares of Harsha Engineers are carrying a premium (GMP) of Rs 212 in the gray market today. The company’s shares are expected to be listed on the leading stock exchanges BSE and NSE on Monday, September 26, 2022.
Harsha Engineering was founded in 1986 by Rajendra Shah and Harish Rangwala. The promoters own 99.7 percent of the company’s equity. It offers a diverse array of precision engineering products across a variety of geographies and end-user industries, including automotive, aerospace, railway, construction, mining, renewable energy, agriculture and other industrial sectors, the DRHP said.
Harsha Engineers IPO: Should You Invest?
“At the higher price range of Rs330, HEIL is valued at 27.7x FY22 profit of 11.9 which in our opinion is reasonable compared to its peers. The company with its strong market share in precision bearing cages and one of the leading players worldwide in organized bearing cages, with a strong customer base with a long-standing relationship that ensures healthy return ratios and visibility into the future. We advise investors to subscribe to HEIL’s IPO,” said brokerage LKP Securities.
Read all Latest business news and Important news here