Belrise Industries IPO booked 67% on Day 1: Should you subscribe?

Belrise Industries

The Rs 2,150-crore IPO of Belrise Industries was subscribed around 67 percent on its first day of bidding (May 21). Non Institutional Investors (NII) took the lead, booking their reserved portion 1.44 times.

The public issue of the automotive component maker received bids for nearly 11.82 crore shares, as against the offer size of 17.71 crore shares, according to data available on the NSE. While the portion kept for NIIs was overbooked, the portion reserved for retail investors was subscribed 48 percent. Qualified Institutional Buyers (QIBs) meanwhile subscribed 42 percent of their reserved portion.

Belrise Industries is raising Rs 2,150 crore via an initial public offering which entirely comprises a fresh issue of shares. The company has set a price band of Rs 85 - 90 per share for its initial share sale, which will remain open for public subscription till May 23. The investors can bid for a minimum of 166 shares, requiring an investment of Rs 14,940, and in multiples thereafter.

Belrise Industries GMP

Ahead of its listing on exchanges, the unlisted shares of the company were trading at Rs 103 apiece in the grey market. This implies a grey market premium (GMP) of 14.44 percent (Rs 13) over the IPO price of Rs 90 per share.

Should you apply?

Anand Rathi has advised investors to subscribe to Belrise Industries IPO. "The company is focusing on increasing its Content per Vehicle along with focusing on EV’s, 4 Wheelers as Commercial Vehicles. We believe that the issue is fairly priced and recommend ‘Subscribe – Long Term’ rating to the IPO," the brokerage said.

Geojit Financial Services also recommended a 'subscribe' rating for a long-term basis, given the firm's "dominant market share, diversified product portfolio, strong presence in EV& IC engine segments, capacity expansions, optimize inventory management and favourable industry outlook".

Bajaj Broking too kept a 'subscribe' rating for long term. "Belrise Industries is confident of higher earnings post IPO as it will save on interest cost and recent acquisition will help in boosting its play in four-wheeler segment. Based on its financial data, the IPO appears reasonably priced. Investors may park funds for medium to long term," the brokerage said.

"Belrise Industries presents a compelling IPO opportunity, backed by strong fundamentals and a leadership position in the automotive components space. The company’s strategic focus on EV components, combined with its extensive OEM partnerships and integrated manufacturing, positions it well for sustained growth. The substantial debt repayment through IPO proceeds is expected to enhance profitability and improve cash flows, offering valuation comfort at a forward P/E of 16x. While investor attention is warranted on related-party transactions and customer concentration, the long-term growth potential and diversification into future-ready segments make Belrise an attractive bet for medium- to long-term investors," said Gaurav Garg from Lemonn Markets Desk.

The company intends to utilise proceeds worth Rs 1,618 crore for the payment of debt. The company had borrowings of close to Rs 2,600 crore in its books as of December 2024.

Belrise Industries is an automotive component manufacturing company based in India, offering a diverse range of safety-critical systems and other engineering solutions for two-wheelers, three-wheelers, four-wheelers, commercial vehicles and agri-vehicles.

Shares of the company will be listed on both NSE and BSE on Wednesday, 28th May, 2025.

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