The initial public offering (IPO) of Harsha Engineers International Ltd, a manufacturer of precision bearing cages, has set a price band of Rs 314-330 a share for its maiden public issue.
The IPO will open for subscription on September 14. The current grey market premium for the IPO stands at Rs 140-150 a share, according to market experts.
The issue will close on September 16, Shares will be credited to successful allottees’ demat accounts on September 23 and the company will make its market debut on September 16.
The IPO consists of a fresh issue of Rs 455 crore and an offer for sale of up to Rs 300 crore by shareholders and promoters.
As part of the OFS, Rajendra Shah is looking to off load shares worth up to Rs 66.75 crore, Harish Rangwala up to Rs 75 crore, Pilak Shah up to Rs 16.50 crore, Charusheela Rangwala up to Rs 75 crore and Nirmala Shah up to Rs 66.75 crore.
A sum of Rs 270 crore from the fresh issue will be used for paying debt, Rs 77.95 crore for purchasing machinery and Rs 7.12 crore for infrastructure repairs and renovation of the existing facilities and general corporate proposes.
This is Ahmedabad-based company's second attempt to go public. It had filed draft papers with the regulator in August 2018.
Axis Capital, Equirus Capital and JM Financial are the lead managers to the issue.
Harsha Engineering was 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 and aerospace, railways, construction, mining, renewable energy, agriculture and other industrial sectors, the DRHP said.
The company has five manufacturing facilities with three in Gujarat and one each in China and Romania.
Harsha Engineers claims 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 91.94 crore on revenue of Rs 1321.48 crore in the year ended March 2022, up from Rs 45.44 crore on revenue of Rs 873.75 crore in previous year. Net debt for the period stood at Rs 356.59 crore, up from Rs 322.08 crore in the year-ago period.
"The top and bottom line growth of the company looks impressive. The public offer looks fairly priced at a post-issue P/E ratio of around 32.70x based on FY 22 earnings. The primary and broader market sentiments - both are positive which should help the issue garner good response. We can anticipate overwhelming response to the IPO on account of reasonable valuations, favourable market conditions and recent positive listings", said Manan Doshi co-founder, UnlistedArena.com .
Earlier this month, three recent IPOs got a good response from investors. Syrma SGS Technology, which listed exchanges on August 25, was subscribed nearly 35 times. Airport service aggregator DreamFolks Services IPO was subscribed 56.68 times. Tamilnad Mercantile Bank got 2.86 times subscription.
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