Harsha Engineers IPO Opens Sep 14, GMP Remains Strong, Check Price Range; should I subscribe?

The initial public offering (IPO) of Harsha Engineers International Ltd will open tomorrow (September 14). The precision bearing cage maker has set a price range of Rs 314-330 per share for its first public offering which will remain open for subscription until Friday, September 16. The company plans to raise Rs 755 crore through this IPO. The IPO of Harsha Engineers consists of a new issue of Rs 455 crore and an offer to sell (OFS) of up to Rs 300 crore by shareholders and promoters. Under the SFO, Rajendra Shah is looking to offload shares worth up to Rs 66.75 crore, Harish Rangwala up to Rs 75 crore, Pilak Shah up to Rs 16.50 crore, Charusheela Rangwala up to Rs 75 crore and Nirmala Shah up to Rs 66.75 crore.

Harsha Engineers IPO Offering Details

Face value: 10 rupees per share
Lot size: 45 shares
Employee discount: Rs 31 per share
QIB (including anchor): 50% of the offering (about 1.14 crore shares)
Non-institutional: 15% of the offering (about 34.2 lakh shares)
Detail: 35% of the offering (about 79.8 lakh shares)
Employee: 83,610 shares
Main managers: Axis Capital, Equirus Capital, JM Financial
Issue Registrar: Link Intimate India Pvt. ltd.

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Shares of Harsha Engineers commanded a gray market premium (GMP) of Rs 212 today, according to people who trade unlisted shares. Shares in the IPO will likely be credited to successful awardees’ demat accounts on September 23, and the company is expected to make its market debut on September 26.

Should we subscribe to the IPO of Harsha Engineers?

Motilal Oswal: Subscribe for Listing Earnings

According to analysts at Motilal Oswal Financial Services, Harsha Engineers, with its dominant position, is well positioned to capture the growing demand for bearing cages across all sectors. “We appreciate its increasing focus on other specialty precision components and the growing electric vehicle segment, which could boost its EBITDA margins. It is rated at 32.7x FY22 P/E, which is at par with its rated peers. Given the resumption of growth in automotive/auxiliary and strong mid-cap momentum, we expect the IPO to go well. We suggest investors subscribe for listing earnings,” they said.

Hem Securities: Subscribe

“The company is offering the issuance at a price range of Rs 314-330 per share at a P/E multiple of 33x based on the 22 PAT exercise after issuance. The company, as a complete solutions provider offering a diverse range of precision engineering products across end-user geographies and industries, has long-standing relationships with top-tier customer base. The company’s strategically located domestic and international production facilities and warehouses, as well as its expertise in tooling, design development and automation, with a consistent track record of growth and financial performance, look solid to us. . Therefore, taking into account all of the above, we recommend that you “Subscribe” on the issue. »

Angel One: Subscribe

In terms of valuations, post-issue P/E stands at 32.7x FY22 EPS (at the upper end of the issue price range). The company’s consolidated PAT grew at a CAGR of around 105% in FY20-22 thanks to margin expansion, according to Angel One’s IPO note. “Harsha Engineers has a diverse product portfolio and solid expertise; we believe these positives have yet to be factored into company-commissioned valuations. So, we have a SUBSCRIBE note on the matter,” he said.

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LKP Securities: Subscribe

“At the higher price range of Rs 330, HEIL is valued at 27.7x FY22 earnings of Rs 11.9, which we believe is reasonable compared to its peers. The company, with its strong market share in precision bearing cages and being one of the world’s leading players in organized bearing cages, having a strong customer base with longstanding relationships delivers rates of return health and visibility for the future. We recommend that investors REGISTER for the IPO.

(Recommendations in this article are from respective research analysts and brokerage firms. FinancialExpress.com takes no responsibility for their investment advice. Investments in capital markets are subject to rules and regulations. Please see your investment adviser before investing.)

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