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HomeBusinessHarsha Engineers IPO fully subscribed on day 1. Know GMP, key points

Harsha Engineers IPO fully subscribed on day 1. Know GMP, key points

The first public offering of the Harsha Engineers IPO was fully subscribed on Wednesday on the first day of registration. At the tender offer, bids were made for 3,24,61,830 shares against 1,68,63,795 shares in the offering, representing 1.92 times subscription, according to data available with the NSE until 1734 hrs. The retail private investor category received 2.28 subscriptions, while the non-institutional investor quota was subscribed 3.60 times. The category for qualified institutional buyers (QIBs) received 0.05 subscriptions.

The public number will be closed on Friday.

The price range is set at 314-330 per share for the first share sale.

Harsha Engineers’ IPO consists of a new issuance of shares that come together in: 455 crore, and an offer for sale (OFS) of up to 300 crore by existing shareholders.

Proceeds from the new issuance will be used for debt payment, financing of working capital requirements for the purchase of machinery, infrastructure repairs and renovation of the existing manufacturing facilities and for general business proposals.

According to market observers, Harsha Engineers shares are available at a premium (GMP) of 210 on the gray market today. The company’s shares are expected to be listed on the leading stock exchanges BSE and NSE on Monday, September 26, 2022.

“With its dominant position, Harsha Engineers is well positioned to meet the growing demand for bearing cages in various industries. We appreciate the increasing focus on other specialty precision components and on the growing EV segment, which could increase EBITDA margins. It is valued at 32.7x FY22 P/E, which is on par with its publicly traded counterparts. Given the recovery in auto/auto tools growth and strong momentum in the mid-caps, we expect the IPO to do well. We encourage investors to subscribe for listing gains,” Motilal Oswal said in an IPO note.

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Harsha Engineers International Ltd is the largest precision bearing cage manufacturer, with a 50-60% market share in the organized market. It offers a diversified range of precision engineering products in different geographies and end-user sectors. It operates under 2 business divisions – engineering business and solar EPC business.

“In valuation terms, the post-issue P/E comes in at 32.7x FY22 EPS (at the high end of the issue price band). The company’s consolidated PAT grew at a CAGR of ~105% over FY20-22 as a result of margin expansion. HEIL has a diverse product portfolio and strong expertise; we believe that these positives have yet to be factored into the valuations imposed by the company. So we have a SUBSCRIBE rating for this matter,” said broker Angel One.

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