Do you recommend investing in the IPO of Harsha Engineers that opens for subscription in the coming week?
Answer
Answer
Before investing in the IPO of Harsha Engineers, here are some important facets of the issue you must be familiar with. Harsha Engineers International Ltd is a manufacturer of precision bearing cages and has its offices and plants located out of the state of Gujarat. It also has two additional plants located in China and Romania. The IPO of Harsha Engineers will be a fresh issue combined with an offer for sale. The IPO will be opening for subscription on Wednesday, the 14th of September and will remain open for 3 working days.
The total size of the IPO will be Rs755 crore, comprising of a fresh issue of Rs455 crore and an offer for sale of Rs300 crore. The price band has been set for the IPO at Rs314 to Rs330 a share. The IPO which opens on 14th September will close on 16th September. The company will finalize basis on 21st September and the stock will be credited to the demat accounts of eligible shareholders on 23rd September. Listing on NSE and BSE is on 26th September. The entire OFS will entail offloading by the promoter group and linked companies.
The fresh issue component of Rs455 crore will be used to bankroll the future plans of the company. Out of Rs455 crore raised (net amount after issue expenses will be lower), a sum of Rs270 crore will be used for repaying or prepaying high cost debt of the company. Another Rs77.95 crore will be utilized for purchasing machinery and equipment for the core business while Rs 7.12 crore will be applied for infrastructure repairs and renovation. This will be the second attempt at IPO, after the earlier IPO in 2018 had to be cancelled.
Harsha Engineers was founded by Rajendra Shah and Harish Rangwala in 1986 and it manufacturers and offers a diverse suite of precision engineering products across geographies. Harsha essentially caters to the automotive, aviation, aerospace, railways, construction, mining and renewable energy sectors. For FY22, Harsha Engineers reported net profits of Rs91.94 crore on revenues of Rs1321.48. Its net debt (net of cash) currently stands at Rs357 crore and a good chunk of this debt will be repaid post the IPO.
Here is how the application limits will look like. Retail applications, can be for minimum of 1 lot of 45 shares worth Rs14,850 and maximum 13 lots of 585 shares worth Rs193,050. The small HNI (S-HNI) segment can invest between 14 lots and 67 lots, with each lot of 45 shares. Big HNIs or B-HNIs can invest in 68 lots and above. The BRLMs for the IPO of Harsha Engineers International Ltd are Axis Capital, Equirus Capital and JM Financial Consultants. Link Intime India is the registrar to the IPO.