Harsha Engineers International — an Ahmedabad-based manufacturer of precision bearing cages — is all set of launch an initial public offering (IPO) worth up to Rs 755 crore on Wednesday, September 14. This will be the fourth initial share sale to hit Dalal Street within a little over a month, following the primary market offerings of Syrma SGS, DreamFolks and Tamilnad Mercantile Bank.
According to dealers, Harsha Engineers commanded a premium of Rs 210 in the grey market — or an unofficial market for unlisted securities — on Tuesday. On Friday, the grey market premium or GMP had stood at Rs 150 on Friday.
"The Harsha Engineers IPO looks reasonably priced, given its post-price-to-equity ratio of roughly 32.70 times based on its 2021-22 results," Abhay Doshi, Co-Founder of Unlisted Arena — a portal that tracks grey markets and deals in unlisted securities — told CNBCTV18.com.
| Date | Grey market premium (in rupees) |
| Sept 13 | 210 |
| Sept 12 | 210 |
| Sept 9 | 150 |
| (Source: IPO Watch) | |
"The company's top and bottom line growth appears to be fair," Doshi said.
Harsha Engineers' IPO — a combination of fresh issuance of shares worth up to Rs 455 crore and an offer for sale (OFS) by existing shareholders — will close for subscription on September 16.
Potential investors will be able to bid for Harsha Engineers International shares within a price range of Rs 314-330 apiece in multiples of 45 under the IPO. That translates to an amount of Rs 14,130-14,850 in order to bid for one lot of Harsha Engineers shares under the public offer. Catch other key details about the Harsha Engineers IPO here
The stock is likely to debut on bourses BSE and NSE on September 26.
Should you subscribe to the Harsha Engineers IPO?
A multitude of brokerages recommend subscribing to the issue.
At the upper end of the price band, the Harsha IPO is valued at 14.2 times its estimated price to earnings of the year ending March 2025, Ventura Securities said in a research report.
The brokerage has a 'subscribe' rating on the issue with a target price of Rs 406 for 18 months, implying an upside of 23 percent.
Motilal Oswal suggests subscribing to the issue for listing gains.
Choice Broking pointed out that Harsha Engineers is "demanding an EV/sales multiple of 2.2 times, which is at a discount to a peer average of 5.6 times... The issue is attractively priced".
| Brokerage | Recommendation |
| Angel One | Subscribe |
| Choice Broking | Subscribe |
| Arihant Capital | Subscribe for long term |
| BP Wealth | Subscribe for long term and for listing gains |
| LKP Securities | Subscribe |
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