Pune-based automotive component manufacturer Belrise Industries, which plans to raise Rs 2,150 crore via an initial public offering, has filed draft documents with the capital markets regulator SEBI.
The IPO consists solely of fresh issue by the company, with no offer-for-sale component. Thus, the entire issue proceeds, excluding offer expenses, will go to the company.
The auto ancillary company may consider raising Rs 430 crore before its IPO launch. If it successfully concludes the pre-IPO placement, the amount will be reduced from the fresh issue.
The main purpose of the IPO is to reduce the debt burden by Rs 1,618.08 crore (which is 62.52 percent of total borrowings) and improve the debt-equity ratio. The remaining funds will be utilised for general corporate purposes.
Incorporated in 1996, Belrise Industries competes with listed peers like Bharat Forge, Uno Minda, Motherson Sumi Wiring India, JBM Auto, Endurance Technologies, and Minda Corporation. It specialises in precision sheet metal pressing and fabrication - the process of joining sheet metal components to create unified structures for assembling vehicle subsystems and bodies.
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It is one of the top three companies in the segment with a market share of 24 percent in the overall two-wheeler metal components segment in India. It has long-standing relationships with prominent multinational OEMs such as Bajaj Auto, Honda Motorcycle & Scooter India, Hero MotoCorp, Jaguar Land Rover, and Royal Enfield Motors, among others.
The Badve family-promoted firm reported a net profit of Rs 310.9 crore for the year ended March 2024, declining 0.9 percent from Rs 313.7 crore in the previous fiscal despite double-digit growth in topline, impacted by weak operating margin. Revenue during the fiscal grew by 13.7 percent to Rs 7,484.2 crore compared to the previous year, with exports' contribution at 76 percent.
EBITDA (earnings before interest, tax, depreciation, and amortisation) increased by 5.6 percent to Rs 924.5 crore, but the margin dropped 95 bps to 12.35 percent during the same period.
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Profit in the three-month period ended June 2024 stood at Rs 71.6 crore on revenue of Rs 1,781 crore.
Axis Capital, HSBC Securities and Capital Markets India, Jefferies India, and SBI Capital Markets have been appointed merchant bankers to the issue.
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