The company’s shares are likely to list with a premium of 33%. The issue was priced in the range of Rs 499-524.
The IPO of Azad Engineering received good response from investors with 80.6 times subscription at close. The category reserved for QIB was subscribed the most at 179 times, followed by NIIs at 87 times. The retail part received 23.7 times bids.
The issue was a fresh equity of Rs 240 crore and an offer for sale (OFS) of Rs 500 crore. Under the OFS, promoter Rakesh Chopdar, Investor Piramal Structured Fund, and DMI Finance offloaded shares.
Analysts are positive on the company over its strong financial track record and superior outlook on growth. “We expect Azad to trade at a premium to peers post the listing,” said Nirmal Bang.
The company is one of the key manufacturers of qualified product lines supplying to global original equipment manufacturers in the aerospace and defence, energy, and oil and gas industries.
It makes complex and highly engineered precision forged and machined components that are mission and life-critical and hence, some of their products have a zero parts per million defects requirement.In the financial year 2023, the company’s revenue from operations rose 31% year-on-year to Rs 261 crore, while net profit for the same period fell 71% to Rs 8.4 crore.
The revenue of the company grew at a CAGR of 43% between FY21 and FY23 and PAT margin grew at a CAGR of 49% in the same period.
Axis Capital, ICICI Securities, SBI Capital Markets and Anand Rathi acted as the book running lead managers to the issue.