Azad Engineering sets price band at Rs 499-524 as Rs 740-cr IPO opens on Dec 20

Azad Engineering to raise Rs 740 crore via IPO next week

Telangana-based Azad Engineering has fixed the price band at Rs 499-524 per equity share for its Rs 740-crore public issue.

The IPO will be open for subscription during December 20-22, while the anchor book will be launched for a day on December 19.

The issue consists of a fresh shares of Rs 240 crore by the company, and an offer-for-sale of shares worth Rs 500 crore by existing shareholders, including promoter Rakesh Chopdar offloading Rs 204.97 crore worth of shares and investor Piramal Structured Credit Opportunities Fund selling off Rs 260.85 crore shares.

Other selling shareholder DMI Finance will sell off Rs 34.18 crore shares in the OFS.

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Promoter Rakesh Chopdar with 78.61 percent stake and Piramal Structured Credit Opportunities Fund with 9.13 percent stake are the major shareholders in the engineered precision forged and machined components maker.

Azad Engineering that manufactures products for global original equipment manufacturers in the energy, aerospace and defence, and oil and gas industries will spend Rs 60.4 crore for buying plant and machinery, while Rs 138.19 crore of the net fresh issue proceeds will be utilised for repaying debts. And the remaining funds will be set aside for general corporate purposes.

General Electric, Honeywell International Inc., Mitsubishi Heavy Industries Ltd, Siemens Energy, Eaton Aerospace and MAN Energy Solutions SE are some of global customers.

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Half of the offer size has been reserved for qualified institutional buyers and 15 percent for high networth individuals. And the remaining 35 percent shares are set aside for retail investors.

Investors can bid for a minimum of 28 equity shares and in multiples of 28 shares thereafter. The minimum application size for retail investors will be Rs 14,672 for 28 shares and their maximum investment in the offer will be Rs 1,90,736 for 364 equity shares as they can invest up to Rs 2 lakh in any IPO.

The merchant bankers to the issue are Axis Capital, ICICI Securities, SBI Capital Markets, and Anand Rathi Advisors.