Mumbai: Precision Camshafts Ltd, an auto-component manufacturer, on Tuesday announced that it will launch its initial public offering (IPO) on 27 January to raise almost 400 crore from the primary market. The issue closes on 29 January.

Precision Camshafts manufactures camshafts, a critical part of an automobile engine. The firm supplies over 150 varieties of camshafts for passenger vehicles, tractors, light commercial vehicles and locomotive engine applications from its manufacturing facilities in Solapur, Maharashtra.

The firm has set a price band of 180-186 for its shares. Precision Camshafts is looking to raise 240 crore through the issuance of fresh shares, while promoters of the company are looking to sell 9.15 million shares through an offer for sale. At the upper end of the price band, the offer for sale component of the issuance will fetch 170.2 crore for the selling shareholders.

Precision Camshafts’ IPO will be the first this year, coming on the heels of a successful 2015 for initial share sales. Last year, 21 firms raised almost 13,600 crore through IPOs, the highest raised through initial share sales since 2010, when 64 firms had raised 37,734.65 crore.

Apart from Precision, over 30 firms filed draft IPO papers with markets regulator Securities and Exchange Board of India last year and are waiting to launch their IPOs.

However, since the start of the year, global and domestic markets have been volatile, driven by concerns around the Chinese economy. Since the start of the year, the benchmark BSE Sensex is down 6.27%, while the Nifty has dropped 6.43%.

The IPO will serve as a litmus test of investor appetite. Several other firms such as HealthCare Global Enterprises Ltd, TeamLease Services Ltd and SSIPL Retail Ltd are planning to launch their share sales by end January or early February, Mint reported on 9 January.

The company plans to use the money raised through the offer for establishing a machine shop for ductile iron camshafts at its export-oriented unit at Solapur.

The company counts several auto manufacturers such as General Motors, Ford Motors, Hyundai, Maruti Suzuki, Tata Motors and Mahindra and Mahindra as its customers.

SBI Capital Markets Ltd, HDFC Bank Ltd and IIFL Holdings Ltd are managing the IPO for the company.

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