Azad Engineering initiated its Initial Public Offering (IPO) on Wednesday, December 20, and will be available till December 22, 2023. The ₹740-crore issue consists of a combination of fresh shares of ₹240 crore by the company and an offer-for-sale of shares worth ₹500 crore by existing shareholders.
Offer details and objectives
The IPO, priced in the range of ₹499-524 per share, aims to channel the fresh issue proceeds into strategic avenues. Azad Engineering plans to allocate ₹60.4 crore towards acquiring plant and machinery, alongside a significant portion of ₹138.19 crore for debt repayment.
Investment insights and lot size
Investors looking to participate in this offering should note that the minimum bid stands at 28 equity shares, with subsequent multiples of 18 shares.
This sets the minimum investment for retail investors at ₹13,972 at the lower price band and ₹14,672 at the upper end.
Company profile
Established in 1983, Azad Engineering has four state-of-the-art manufacturing facilities in Hyderabad, Telangana, catering primarily to original equipment manufacturers (OEMs) in the aerospace, defence, energy, and oil and gas sectors.
Should one subscribe?
Canara Bank Securities suggests subscribing to the IPO, emphasising the company's track record, sound business strategies, and notable revenue growth.
However, they caution about the relatively high valuation at 292.7x P/E compared to industry peers.
Nirmal Bang shares a similar sentiment, recommending subscription based on Azad's extensive efforts over the years to qualify and develop components.
They highlight the company's competitive edge due to high entry barriers and foresee potential premium valuation compared to peers, citing a stronger track record and growth outlook.
Watch | Vishnu Malpani, Whole-Time Director of Azad Engineering, delved into the specifics of the company's IPO during an interview with CNBC-TV18.
Both firms acknowledge Azad Engineering's robust growth trajectory but caution potential investors about the comparatively higher valuation in the market.
(Edited by : Amrita)
First Published: Dec 20, 2023 9:55 AM IST
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