Aeroflex Industries Ltd has filed a draft red herring prospectus with the Securities Exchange Board of India (Sebi) to raise around Rs 350 crore through an initial public offering.
The IPO consists of a fresh issue of Rs 160 crore and an offer-for-sale of up to Rs 190 crore by its existing shareholders and promoters. The OFS comprises up to 12.3 million shares by Sat Industries Ltd and up to 5.2 million shares by Italica Global FZC. Sat Industries holds 92.18 percent stake, while Italica Global FZC has 6.52 percent holding in the company.
Proceeds from the issue worth Rs 35 crore will be used to repay debt and Rs 84 crore will be used for funding working capital requirements. Pantomath Capital Advisors Pvt Ltd is the sole lead manager to the issue.
Aeroflex is a manufacturer and supplier of eco-friendly metallic flexible flow solution products that serve both domestic and international markets. Its products are exported to over 80 countries, including the USA and Europe, among others.
In industrial and commercial ecosystems, the transfer of substances such as air, liquid, and solid is facilitated by flexible flow solutions. These solutions are critical in connecting the origin and endpoint of various processes. Aeroflex offers a vast range of over 1,700 Stock Keeping Units (SKUs) for its products.
The company has recently developed bronze products and has over 55 products in its pipeline. Due to the complexity of research and product development, varied product applications, technical expertise required, precision involved, and lengthy and strict customer qualification processes, Aeroflex's business model presents significant barriers to entry for new players and exit barriers for existing customers.
Aeroflex is a subsidiary of Sat Industries which is also listed on BSE and NSE. Both Aeroflex and Sat Industries Limited have dividend payment history. Sat Industries Limited has a track record of scaling up multiple diverse businesses backed by acquisition led strategy.
In FY22, the company reported a revenue of Rs 240.80 crore against Rs 144.77 crore a year ago. Its net profit for the period stood at Rs 27.51 crore versus Rs 6.01 crore last year and the net profit margin improved to 11.41 percent from 4.15 percent. As of January 2023, its net debt stood at Rs 41.75 crore.
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