Harsha Engineers IPO: Harsha Engineers International, manufacturer of precision bearing cages, share sale via initial public offering began today (September 14, Wednesday) and will end on September 19 (Friday). The company is planning to raise Rs 755 crore from the IPO which is a mix of fresh issue and offer for sale by existing shareholders. The IPO was fully subscribed by retail investors and nin-institutional investors.
Harsha Engineers IPO Price Band
Harsha Engineers is selling shares in price band of Rs 314-330 per share and retail investors can bid for minimum one lot of 45 shares up to maximum of 13 lots at the upper end of the price band one lot of Harsha Engineers shares will cost Rs 14,850.
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Harsha Engineers has reserved 50 per cent of shares in the IPO for Qualified Institutional Buyers (QIBs), 15 per cent for Non-Institutional Investors which include High Net Worth Individuals and 35 per cent for Retail Investors.
Harsha Engineers IPO Issue Size
The Rs 755-crore 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.
The offer also includes a reservation for subscription by eligible employees.
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Proceeds from the fresh issue 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 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 is the Ahmedabad-based company's second attempt to go public. Earlier it had filed its draft papers with the regulator in August 2018.
The company 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' 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 Engineers IPO: Should You Invest?
Mumbai-based brokerage Choice Broking has subscribe rating on the stock as it says that the issue is attractively priced.
“At higher price band, Harsha Engineers is demanding enterprise value to sales multiple of 2.2 times, which is discount to peer average of 5.6 times. Excluding these highly valued manufacturers, still the demanded valuation by Harsha Engineers is at discount to the peer average. Thus the issue is attractively priced. Considering the future growth outlook of the bearing market; Harsha Engineers' dominant position in the bearing cage market and the demanded attractive valuations, we assign a “subscribe” rating for the issue,” Choice Broking said in a report.
