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Harsha Engineers IPO to open on September 14: Grey market premium, price band and more

Harsha Engineers IPO to open on September 14: Grey market premium, price band and more

This is Harsha Engineers' second attempt to go public. It had filed its draft papers with the regulator in August 2018 but later shelved the proposal due to the IL&FS crisis, which shook the NBFC (non-banking financial company) sector.

Harsha Engineers has fixed the IPO price band at Rs 314-330 per share for the Rs 755 crore initial share offer. Harsha Engineers has fixed the IPO price band at Rs 314-330 per share for the Rs 755 crore initial share offer.

The upcoming initial public offering (IPO) of Ahmedabad-based Harsha Engineers International would open for subscription on September 14 and conclude on September 16.

The precision bearing cage manufacturer's public issue consists of a fresh issue of equity shares aggregating to Rs 455 crore and an offer-for-sale (OFS) of up to Rs 300 crore by existing shareholders.

As a part of the OFS, the company's promotors and promotor groups -- Rajendra Shah, Harish Rangwala, Pilak Shah, Charusheela Rangwala and Nirmala Shah -- would offload shares. The OFS offer also includes a reservation for subscription by eligible employees.

This is the company's second attempt to go public. It had filed its draft papers with the regulator in August 2018 but later shelved the proposal due to the IL&FS crisis, which shook the NBFC (non-banking financial company) sector.

IPO price band:

Harsha Engineers has fixed the IPO price band at Rs 314-330 per share for the Rs 755 crore initial share offer.

On the IPO front, half of the issue size has been reserved for qualified institutional investors, 35 per cent for retail investors and the remaining 15 per cent for non-institutional investors.

Investors can bid for a minimum of 45 equity shares and in multiples of 45 equity shares thereafter.

Grey market premium:

Market participants said Harsha Engineers IPO grey market premium (GMP) today is at Rs 200. It implies that the grey market is expecting the lender to list around Rs 530 (Rs 330 + Rs 200), which is more than 60 per cent higher than the IPO's upper band price of Rs 330 per equity share.

Expert view:

"The IPO pricing looks reasonable given the company's impressive top and bottom line growth. The offer looks fairly priced at a post-issue P/E ratio of around 32.70x based on FY22 earnings. All the categories would see descent subscriptions amid the favourable market conditions and recent positive listings, Manan Doshi of UnlistedArena.com told Business Today.

Earlier this week, airport service aggregator Dreamfolks made a strong debut at the exchanges, listing a premium of 54.91 per cent against the issue price of Rs 326.

"Although, majority of revenues come from business outside India. Strategically located manufacturing facilities help it cater to the global markets cost-effectively and efficiently," he added.

The company has five manufacturing facilities with two of its key manufacturing facilities at Changodar and Moraiya, near Ahmedabad in Gujarat, and one manufacturing unit each at Changshu, China and Ghimbav Brasov in Romania, which allow access to its customers in over 25 countries.

Harsha Engineers' revenue from operations increased by 51.24 per cent to Rs 1,321.48 crore for fiscal 2022, from Rs 873.75 crore for fiscal 2021, while profit after tax doubled to Rs 91.94 crore for fiscal 2022, from Rs 45.44 crore for fiscal 2021.

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

(With inputs from PTI)

Published on: Sep 09, 2022, 3:13 PM IST
Posted by: prashun talukdar, Sep 09, 2022, 3:04 PM IST