Amid sell-off on Dalal Street, the gray market premium of Harsh Engineers IPO, which is likely to list on domestic bourses on September 26, has now reduced to Rs 180 from Rs 200 earlier. If trends in the gray market are to be believed, the stock can list at Rs 500 which is a premium of 50% from its issue price of Rs 330.

The public issue of Harsha Engineers garnered strong response and was subscribed 74.7 times on the final bidding day.The issue received bids for 125.97 crore shares against the 1.69 shares on offer, according to the stock exchanges data. This the strongest response to an IPO from investors so far in 2022. The qualified institutional buyer portion was subscribed 178.26 times, while the portion reserved for non-institutional investors witnessed a subscription of 71.32 times. The retail investors’ portion was subscribed 17.63 times.

The Rs 755-crore IPO comprises issuance of fresh equity shares worth Rs 455 crore, whereas existing shareholders and promoters will offload Rs 300 crore from the stake via offer for sale (OFS). The price band for the share sale has been fixed at Rs 314-330 apiece.

The proceeds from the issue will be put towards payment of debt worth Rs 270 crore, payment of machinery costing Rs 77.95 crore, infra repairs worth more than Rs 7 crore and renovation of the existing facilities, along with general corporate purposes.

Abhay Doshi, Co-founder, Unlisted Arena is of the view that, “Strong revenue growth, profitability and reasonable pricing of Harsha Engineers has been able to captivate interest of investors which led to overwhelming subscription, indicating a stellar listing on cards. The IPO may list above Rs 500 mark if the market remains in a balanced state”.

Ahead of the issue, while the majority of the brokerages were positive and suggested a ‘Subscribe’ rating, few were also cautious given the rising prices of raw materials and dependency on major clients as key concerns.

Harsha Engineers offers a diverse suite of precision engineering products across geographies and end-user industries, including automotive, aviation and aerospace, railways, construction, mining, renewable energy, agriculture and more.

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By Dipak

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