Harsha Engineers IPO: Harsha Engineers International’s initial public offering (IPO), which drew 74.70 subscriptions last week, was well received by institutional buyers. The company will now be listed on the NSE and BSE stock exchanges on Monday (26 September). Its public offering had received offers for 125.96 billion shares versus 1.68 billion shares on offer.
Harsha Engineers IPO GMP today
The company’s unlisted shares are trading at a premium of Rs.162. So the gray market premium (GMP) is 162 rupees. This means the company’s shares are now trading at Rs 492, which is Rs 162 above the upper IPO share price range of Rs 330 per share.
However, market experts also suggest to investors that GMP is unofficial data that is not regulated. Therefore, those who adhere to GMP are advised to review the company’s financials as well, as the company’s balance sheet gives a better picture of the company’s fundamentals.
Harsha Engineers IPO subscription
The portion reserved for qualified institutional buyers received 178.26 subscriptions, while the portion reserved for non-institutional investors received 71.32 subscriptions. The retail portion was subscribed 17.63 times.
Harsha Engineers IPO: Basic Details
The Harsha Engineers IPO had a lot size of 45 shares. That means an investor has to spend at least Rs 14,850. A retail investor could bid for up to 13 lots or 585 shares by spending Rs 1,93,050. Harsha Engineers IPO price range has been set at Rs 314-330 per share.
Axis Capital Limited, Equirus Capital Private Limited and JM Financial Consultants were the lead managers of the IPO. The company’s shares will be listed on September 26 on both the NSE and the BSE.
About Harsha Engineers
Harsha Engineers is the largest precision bearing cage manufacturer by sales in the organized sector in India and is among the top precision bearing cage manufacturers in the world. The company offers a diversified range of precision engineering products for all regions and end-user industries.
Finance from Harsha Engineers
Harsha Engineer’s operating revenue increased by 51.24 per cent to Rs.1,321.48 crore in the 2021-22 financial year compared to Rs.873.75 crore a year ago. Its after-tax profit doubled from Rs 45.44 crore for FY2021 to Rs 91.94 crore for FY2022.
What experts say
KR Choksey said in his report that the company’s long-term prospects are favorable given its long-standing relationships with key industry players. “The company has a healthy 50-60 percent market share in the Indian precision organized bearing cage market. The company has healthy return ratios and a good earnings forecast for the future.”
Brokerage firm Ventura Securities has announced that it expects the company’s FY22 revenue, EBITDA and PAT to grow to Rs 2,125 crore, Rs 313, at a CAGR of 17.2 per cent, 22.7 per cent and 32.1 per cent respectively Crore or Rs 212 Crore will grow -25E. The EBITDA and PAT margins are expected to improve by 191 basis points (to 14.7 percent) and 301 basis points (to 10 percent) over the same period. Subsequently, the RoIC is expected to improve by 586 basis points to 21.5 percent by FY25.
It also detailed a bull-and-bear case scenario for the company based on its FY25 revenue and PAT margin estimates.
In the bull case, Ventura’s note states: “We have sales of 2,400 Cr shares for FY25 (up 39.7 percent from the IPO price).”
Regarding the bear case, the release reads: “We have FY25 turnover of Cr1,800 shares (down 16.1 percent from IPO price).”
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