Belrise Industries IPO opens today: Should you subscribe to it?

Belrise Industries has launched its initial public offering (IPO) today, May 21, with a price band set between Rs 85 and Rs 90 per share. Investors can participate by applying for a minimum of 166 shares and in multiples thereafter. This offering, entirely a fresh issue, closes on May 23, aiming to raise Rs 2,150 crore. The allotment of shares is expected to be finalised on May 26, and the listing is tentatively set for May 28.

The IPO proceeds are earmarked for pre-payment and repayment of Belrise Industries' debt and for general corporate purposes. Axis Capital, HSBC Securities & Capital Markets, Jefferies India, and SBI Capital Markets are the lead managers, with Link Intime India serving as the registrar. Belrise Industries' shares will be listed on both BSE and NSE.

Belrise Industries, established in 1988 and based in Waluj, Maharashtra, manufactures essential components for the automotive sector. The company's portfolio includes sheet metal and casting parts, polymer components, and suspension systems, catering to two, three, and four-wheel vehicles. Over the years, it has become a key supplier to automotive giants like Bajaj, Honda, Hero, and Tata Motors, servicing 27 original equipment manufacturers (OEMs) globally as of June 2024.

Belrise Industries raised Rs 645 crore from anchor investors as it allocated 7,16,66,665 shares at a price of Rs 90 per share. Its anchor book included names like Blackrock, Smallcap World Fund, Prudential Assurance Company, Valuequest India, Pinebridge Global Funds, BNP Paribas, and Tocu Europe among others.

Financially, Belrise Industries reported a net profit of Rs 245.47 crore and revenue of Rs 6,064.76 crore for the nine months ending December 31, 2024. In the fiscal year 2023-24, the company achieved a net profit of Rs 352.70 crore on revenue totalling Rs 7,555.67 crore. The company's market capitalisation stands at approximately Rs 8,010 crore.

The IPO is structured to provide 50 per cent of shares to qualified institutional buyers, 15 per cent to non-institutional investors, and the remaining 35 per cent to retail investors. This allocation strategy ensures a broad-based participation across investor categories.

The competitive landscape for Belrise Industries is robust, with the company leveraging its diverse product range and strong client relationships. The company's strategic focus on safety-critical systems and engineering solutions positions it well within the automotive supply chain.

Investors eyeing this IPO should note the critical dates: The offering opens today and concludes on May 23. The basis of allotment is expected on May 26, followed by refunds initiation and credit of shares by May 27. The tentative listing date is May 28, subject to market conditions and regulatory approvals. Here's what brokerage firms said about the IPO of Belrise Industries:
 

ICICIDirect Research
Rating: Subscribe
Belrise has grown healthy double digits in the past and with introduction of new products aims for a similar growth trajectory going forward as well. With bulk of exposure to 2W space, near term prospects at Belrise also look promising coupled with its premiumisation led content/vehicle increase play, said ICICIDirect.

"Belrise is well poised to clock Rs 500 crore of PAT in FY27E which makes it a lucrative offering at 16 times P/E on FY27E compared to other domestic ancillary players. Henceforth, we assign an 'subscribe' rating on Belrise Industries. Healthy double digit returns ratios and margin profile also provide good margin of safety to our investment thesis," it said.

Choice Broking
Rating: Subscribe
Belrise Industries has demonstrated growth in both revenue and net profit, its margins have come under pressure. To address this, it is focused on increasing its content per vehicle, which is expected to enhance profitability. Driven by rising product sales and increasing international presence, it has demonstrated strong growth in revenue, said Choice Broking.

"The planned debt repayment is likely to contribute further to margin improvement. The company’s recent acquisition is expected to enhance its product offerings and drive sales growth, contributing positively to its overall business performance. Thus, we recommend a 'subscribe' rating for the issue," it added.

Anand Rathi Shares & Stock Brokers
Rating: Subscribe for long term
As of FY24, Belrise ranked among the top three companies in India’s two-wheeler metal components segment, holding a 24 per cent market share based on revenue. With a strong track record in process engineering and technology adoption, they strive to uphold high manufacturing excellence across all their facilities, said Anand Rathi Shares & Stock Brokers.

Belrise is valued at 26 times its FY24 EPS. The company's market capitalization stands at Rs 8,008.9 crore, with a market cap-to-sales ratio of 1.07 based on its FY24 earnings. The company is focusing on increasing its Content per Vehicle along with focusing on EV’s, 4 Wheelers as Commercial Vehicles," it added with a 'subscribe for long term' rating.

Arihant Capital Markets
Rating: Subscribe
Belrise has a 24 per cent market share in the domestic 2-wheeler segment and long-standing relationships with 29 global OEMs, it is well-positioned for growth. It is expanding its content per vehicle through premium, powertrain-agnostic products and moving up the value chain from Tier-1 to Tier-0.5 supplier status, said Arihant Capital Markets.

"Strategic diversification into EV components, CNG systems, and solar sheet metal parts enhances long-term visibility. These strengths, along with increasing automation and vertical integration, provide a strong foundation for margin expansion. At the upper band of Rs 90, the issue is valued at a PE ratio of 25.76 times. We are recommending a 'subscribe' rating for this issue," it said.

SMIFS
Rating: Subscribe
As the industry pivots toward premiumization, electrification, and global supply chain integration, Belrise is forward-looking strategies and execution track record support a valuation premium, making it a compelling growth and margin expansion story in India’s evolving auto component sector, said SMIFS.

"We recommend to subscribe to the issue as a good long term investment as post commissioning and ramp-up of the capacity expansion being undertaken, the company would clock decent topline and bottomline growth coupled with margin improvement and the valuations seem to offer apt margin of safety in the long term, backed by descent credentials," he said.

BP Equities
Rating: Subscribe
Belrise has launched a production line for sheet metal parts for solar panels, supplying a significant North American solar energy company, further diversifying its operations, said BP Equities. "The issue is valued at a P/E ratio of 17.8 times, based on FY25 earnings, which is relatively cheaper compared to its peers. We recommend a 'subscribe' rating for this issue," it added.

Ventura Securities
Rating: Subscribe
Belrise leverages strong integration, over 700 robots, and IoT-enabled plants to ensure quality. 74 per cent of FY24 revenue came from EV-agnostic parts. It's expanding into EV-specific components with a Pune plant for hub motors and chargers, backed by five patents and a Chinese tech deal, said Ventura Securities.

"A recent acquisition of a Delhi-based plastic molding firm boosts its presence with Japanese OEMs and high-tensile components. In Q1FY25, revenue stood at Rs 1,780.9 crore with a 13.5 per cent Ebitda margin. Belrise is well-positioned to grow across EVs, exports, and value-added products," it added with a 'buy' rating.