Harsha Engineers IPO: Latest GMP; know more about allocation, listing

The Harsha Engineers International IPO was oversubscribed 74.70 times on the last day of the public offering. Qualified institutional buyers (QIBs) placed the highest bids in the IPO, followed by high net worth customers. Retail investors also showed strong demand for the IPO. On Sunday, on the gray market, the IPO is traded at 240. The Company will complete the process of allocating shares to the auction participants within six working days from the closing date of the IPO.

Engineer Harsha IPO GMP

In the gray market, Harsha Engineers IPO have a GMP of 240 per current equity share. A gray market is where a company’s shares are informally offered to traders.

With GMP of 240 per share, Harsha Engineers expected to list at higher price 570 per share (upper price range of 330 per person plus 240 per GMP share).

Harsha Engineers IPO Allocation

In its red herring prospectus, Harsha Engineers states that “The Company is required to complete the allocation under the Offer within six business days of the Tender/Offer Closing Date.”

That said, Harsha Engineers is expected to allocate shares to qualified bidders during the IPO, on September 21.

The company is able to make market launched on September 26, 2022. It will be listed on both NSE and BSE.

Harsha Engineers’ IPO

Harsha Engineers has launched an Initial Public Offering (IPO) to raise capital 755 crore. On Day 3, the IPO was oversubscribed 74.70 times. The section for the QIB is oversubscribed by a whopping 178.26 times, while the section for the NII category (HNIs) is oversubscribed by 71.32 times. The section dedicated to retail individual investors was oversubscribed 17.63 times.

The IPO has a price range of 314 and 330 per equity share.

Growth prospects!

Harsha Engineers is the largest manufacturer of precision bearing cages by revenue, in the organized sector in India, and one of the leading manufacturers of precision bearing cages in the world. The company offers a diverse set of precision mechanical products across geographies and industries to end users.

It holds about 50-60% share in the organized segment of the Indian bearing cage market and 6.5% share in the global organized bearing cage market for brass, steel and polyamide cages. in the year CY 2021.

In fiscal year 22, the company’s revenue recorded strong growth 1.321.5 crore vs 873.7 crore in FY21 and 885.8 crore in fiscal year 20. PAT has increased 91.9 crore in fiscal year 22 vs 45.4 crore in FY21 and 21.9 crore in FY20. As of March 31, 2022, the company’s EBITDA margin and NPAT stood at 14.1% and 6.9% respectively.

In its IPO report, KR Choksey in its previous report stated that “We believe the long-term outlook of the company is favorable, given its long-term relationships with key players in the industry. . The company with a healthy market share of 50-60% in India has a precise bearing cage market organization. The company with good margins and good earnings potential is ahead.”

Furthermore, in its IPO announcement, Ventura Securities said, “We are expecting HEIL’s revenue / EBITDA / NPAT to grow at a CAGR of 17.2% / 22.7% / 32.1. % to 2.125 cr/ 313 cr / 212 cr vs FY22-25E respectively, while EBITDA margins and NPAT are expected to improve by 191% (to 14.7%) and 301% (to 10.0%) respectively. with the same period. After that, RoIC is expected to improve 586bps to 21.5% in fiscal 25″.

In its note, Ventura Securities also explained a bullish and bearish scenario for the company based on the company’s fiscal 25 year revenue and after-tax profit margin estimates.

In the event of a price increase, Ventura notes, “We have assumed 25-year sales of 2,400 cr INR (22-25 FY2 CAGR of 22.0%) and NPAT margin of 10%, which should lead to to the Bull Case price target of 461 per share (up 39.7% from the IPO price).

In the bear case, the note says, “We have assumed 25 year sales of 1,800 cr INR (22-25% compound annual growth rate of 10.9%) and the following margin tax is 8.0%, which would result in a bear case price target of 277 per share (down 16.1% from the IPO price). “

On the stock exchange, Harsha Engineers will compete with listed companies such as Timken India, SKF India, Rolex Rings and Sundaram Fasteners.

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