Harsha Engineers International refiles draft papers, to raise Rs 755 crore via IPO

Harsha Engineers International IPO

Harsha Engineers International has filed preliminary papers with the capital markets regulator for a Rs 755 crore initial public offering.

The planned offer consists of a fresh issue of shares for Rs 455 crore and an offer for sale of shares for Rs 300 crore by promoters Rajendra Shah, Harish Rangwala, Pilak Shah, Charusheela Rangwala and Nirmala Shah.

A portion of the shares will be reserved for employees, who may get them at a discount to the issue price.

Harsha Engineers, the largest manufacturer of precision bearing cages in terms of revenue in the organised sector in India, may consider raising Rs 90 crore before filing the IPO papers with the Registrar of Companies, according to the draft documents. If the pre-IPO placement is completed, the fresh issue size will be reduced proportionately.

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The Ahmedabad-based company will use the proceeds of the issue to repay debt (Rs 270 crore), purchase machinery (Rs 77.95 crore), repair infrastructure and renovate production facilities including office premises in India (Rs 7.11 crore), apart from general corporate purposes.

The company had initially filed draft papers for an IPO in August 2018.

Harsha Engineering was promoted and founded by Rajendra Shah and Harish Rangwala in 1986. The promoters hold 99.7 percent of the company’s equity.

It offers a diverse suite of precision engineering products across geographies and end-user industries, including automotive, aviation & aerospace, railways, construction, mining, renewable energy, agriculture and other industrial sectors. It has five manufacturing facilities located in Gujarat, China and Romania.

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Harsha Engineers claimed to have a 50 percent market share in the organised segment of the Indian bearing cages market and a 5.2 percent market share in the global organised bearing cages market for brass, steel and polyamide cages in CY20.

The company recorded a profit of Rs 45.44 crore on revenue of Rs 873.75 crore in the year ended March 2021, compared with profit of Rs 21.9 crore and revenue of Rs 885.85 crore in previous year. In the six months period ended September 2021, its profit stood at Rs 43.7 crore on revenue of Rs 629.46 crore.

India’s bearings market is expected to grow at the highest CAGR of 7.9 percent in the Asia Pacific region during 2021-2029 and is estimated to be valued at $9 billion in 2029.

Axis Capital, Equirus Capital and JM Financial are the book running lead managers to the issue.