Harsha Engineers IPO: Harsha Engineers International’s initial public offering (IPO), which got subscribed 74.70 times last week, saw a great response from institutional buyers. The company is now going to be listed on the stock exchanges, both NSE and BSE, on Monday (September 26). Its public offer had received bids for 125.96 crore shares against 1.68 crore shares on offer.
Harsha Engineers IPO GMP Today
The company’s unlisted shares are trading at a premium of Rs 162. So, its grey market premium (GMP) is Rs 162. It means that the company’s shares are now available at Rs 492, which is Rs 162 above the upper IPO share price band of Rs 330 apiece.
However, market experts also suggest to investors that GMP is unofficial data, which is non-regulated. So, those who follow GMP are advised to go through the financials of the company as well because the balance sheet of the company will give a better picture of the company’s fundamentals.
Harsha Engineers IPO Subscription
Its qualified institutional buyer portion was subscribed 178.26 times, while the portion reserved for non-institutional investors saw a subscription of 71.32 times. The retail investors’ portion was subscribed 17.63 times.
Harsha Engineers IPO: Basic Details
The lot size of Harsha Engineers IPO was 45 shares. It means an investor needed to spend a minimum of Rs 14,850. A retail individual investor could submit bids for up to 13 lots or 585 shares by spending Rs 1,93,050. Harsha Engineers IPO’s price band was fixed at Rs 314-330 per share band.
Axis Capital Limited, Equirus Capital Private Limited and JM Financial Consultants were the lead managers of the IPO. Shares of the company will be listed on both NSE and BSE on September 26.
About Harsha Engineers
Harsha Engineers is the largest manufacturer of precision bearing cages, in terms of revenue, in organised sector in India, and among the leading manufacturers of precision bearing cages in the world. The company offers diversified suite of precision engineering products across geographies and end-user industries.
Harsha Engineers’ Financials
Harsha Engineer’s revenue from operations during the financial year 2021-22 jumped 51.24 per cent to Rs 1,321.48 crore, compared with Rs 873.75 crore a year ago. Its profit after tax doubled to Rs 91.94 crore for the financial year 2022, from Rs 45.44 crore for fiscal 2021.
What Experts Say
KR Choksey in its report has said the company’s long-term prospects are favourable, given its long-standing relationship with key industry players. “The company enjoys a healthy market share of 50-60 per cent in the Indian organized precision bearing cages market. The company has healthy return ratios and good earnings visibility going ahead.”
Brokerage firm Ventura Securities has said it is expecting the company’s revenue, EBITDA and PAT to grow at a CAGR of 17.2 per cent, 22.7 per cent and 32.1 per cent to Rs 2,125 crore, Rs 313 crore and Rs 212 crore, respectively, over FY22-25E. Its EBITDA and PAT margins are expected to improve by 191 bps (to 14.7 per cent) and 301 bps (to 10 per cent), respectively, over the same period. Subsequently, RoIC is expected to improve by 586bps to 21.5 per cent by FY25.
It also explained a bull and bear case scenario for the company based on its FY25 revenues and PAT margins estimates.
In the bull case, Ventura’s note said, “We have assumed FY25 revenues of INR 2,400 cr (FY22-25 CAGR of 22.0 per cent) and PAT margin of 10 per cent, which will result in a Bull Case price target of Rs 461 per share (an upside of 39.7 per cent from IPO price).”
In the bear case, the note said, “We have assumed FY25 revenues of INR 1,800 cr (FY22-25 CAGR of 10.9 per cent) and PAT margin of 8.0 per cent, which will result in a Bear Case price target of Rs 277 per share (a downside of 16.1 per cent from IPO price).”
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