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Business News/ Markets / Ipo/  Harsha Engineers IPO fully subscribed on day 1. Know GMP, key points

Harsha Engineers IPO fully subscribed on day 1. Know GMP, key points

Harsha Engineers IPO consists of fresh issue of shares aggregating to ₹455 crore & OFS of ₹300 crore

Harsha Engineers IPO has opened for subscription (Shutterstock)Premium
Harsha Engineers IPO has opened for subscription (Shutterstock)

The initial public offer of Harsha Engineers IPO got fully subscribed on the first day of subscription on Wednesday. The public offer received bids for 3,24,61,830 shares as against 1,68,63,795 shares on offer, translating into 1.92 times subscription, according to data available with the NSE till 1734 hrs. Retail individual investors' category received 2.28 times subscription, while the quota for non-institutional investors was subscribed 3.60 times. The category for qualified institutional buyers (QIBs) got 0.05 times subscription.

The public issue will conclude on Friday.

The price band has been fixed at 314-330 per share for its initial share sale.

Harsha Engineers IPO consists of a fresh issue of equity shares aggregating to 455 crore, and an offer-for-sale (OFS) of up to 300 crore by existing shareholders. 

The proceeds from the fresh issue will be utilised for debt payment, funding working capital requirements towards purchase of machinery, infrastructure repairs and renovation of the existing production facilities and for general corporate proposes.

As per market observers, Harsha Engineers shares are available at a premium (GMP) of 210 in the grey market today. The company's shares are expected to list on leading stock exchanges BSE and NSE on Monday, September 26, 2022.

“Harsha Engineers with its dominant position is well placed to capture the growing bearing cage demand across industries. We like its increasing focus on other specialized precision components and on the growing EV segment which could boost its EBITDA margins. It is valued at 32.7x FY22 P/E which is at par with its listed peers. Given growth recovery in auto/auto ancillary and strong momentum in the midcaps, we expect the IPO to do well. We suggest investors to Subscribe for listing gains," said Motilal Oswal in an IPO note.

Harsha Engineers International Ltd is the largest manufacturer of precision bearing cages, with 50-60% market share in the organized market. It offers diversified suite of precision engineering products across geographies and end-user industries. It operates under 2 business divisions - engineering business and solar EPC business.

“In terms of valuations, the post-issue P/E works out to 32.7x FY22 EPS (at the upper end of the issue price band). Company’s consolidated PAT has grown at CAGR of ~105% over FY20-22 on back of margin expansion. HEIL has diverse product portfolio and strong expertise; we believe that these positives are yet to be factored in the valuations commanded by the company. Thus, we have a SUBSCRIBE rating on the issue," said brokerage Angel One.


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Published: 14 Sep 2022, 08:08 AM IST
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