Harsha Engineers IPO: GMP, subscription status on day 2 of the issue

Market


The initial public offer (IPO) of Harsha Engineers 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.

Harsha Engineers International, a manufacturer of precision bearing cages, has fixed the price band at 314-330 per share for its 755-crore initial share sale. The public issue will conclude on Friday, September 16, 2022.

As per market observers, Harsha Engineers shares are available at a premium (GMP) of 203 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.

The 755-crore 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.

“At the higher price band of Rs330, HEIL is valued at 27.7x FY22 earnings of 11.9 which in our view is reasonable compared to its peers. The company with its strong market share in precision bearing cages and being one of the leading players globally in organized bearing cages, having strong clientele with long standing relationship provides healthy return ratios and visibility going ahead. We recommend investors to SUBSCRIBE to the IPO of HEIL,” said brokerage LKP Securities.

Proceeds from the fresh issue to the tune of up to 270 crore will be utilised for debt payment, up to 76 crore for funding working capital requirements towards purchase of machinery, up to 7 crore for infrastructure repairs and renovation of the existing production facilities and for general corporate proposes.

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

As of March 31, 2022, it has manufactured more than 7,205 bearing cages and more than 295 other products. In addition, over the past three years its product development and innovation center has developed more than 1,200 products in different bearing types.

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