Azad Engineering Limited is launching its IPO! All You Need to Know Before Applying: Issue Price, Financials, GMP, Anchor List

AZAD Engineering’s IPO is attracting attention with notable investors such as Sachin Tendulkar, Saina Nehwal, and VVS Laxman. Here are some key details:

– IPO Period: 20th to 22nd December 2023
– IPO Value: Around ₹740 Crore
– Price Range: ₹499 to ₹524 per share (However, there are speculations that the Grey Market Premium is around ₹430 to ₹450)

Subscription Details:
– Retail Investors:
– Lot Size: 28 shares
– Application Amount: ₹14,672
– Total Applications: 1,75,572

– Small HNI Investors:
– Lot Size: 392 shares
– Application Amount: ₹2,05,408
– Total Applications: 1,791

– Big HNI Investors:
– Lot Size: 1,932 shares
– Application Amount: ₹10,12,368
– Total Applications: 3,583

The retail portion of the IPO is 35%, and the face value of each share is ₹2.

Azad Engineering Limited is a key manufacturer of specialized products, serving top global OEMs in the energy, aerospace, defense, and oil and gas industries. They excel in crafting precision-engineered components essential for critical missions and life-saving applications.

They run four state-of-the-art manufacturing plants in Hyderabad, Telangana, covering a total of 20,000 square meters. Additionally, they have plans for two more facilities in Tuniki Bollaram and Mangampet villages, Telangana, with areas of 94,898.78 square meters and 74,866.84 square meters, respectively.

Their expertise lies in creating detailed and essential high-precision forged and machined parts. Boasting approximately 45 accredited manufacturing techniques and 1,400 approved components, they view themselves as vital allies for OEMs in their specific sectors.

They have long-standing partnerships with both Indian and international OEMs, notably with giants such as General Electric and Mitsubishi Heavy Industries, Ltd. On average, their collaborations with these major entities span more than a decade.

They have a varied international clientele, with 80.38% of their revenue stemming from foreign markets. Significant portions of this revenue originate from Japan (35.47%), the USA (23.01%), and India (19.75%).

Azad Engineering Financials and Key Performance Indicator

Between the fiscal years ending on March 31, 2023, and March 31, 2022, Azad Engineering Limited saw a 31.24% rise in revenue, while its profit after tax (PAT) decreased by 71.24%.

The market capitalization of Azad Engineering’s IPO stands at Rs 3,097.52 Cr with a P/E ratio of 292.74.

Pros:

1. Their dedication to quality, innovation, and cost efficiency gives them a distinct competitive advantage.

2. They have a strong brand reputation in the industrial pumps and valves sector due to their established presence.

3. The rising need for industrial pumps and valves across various industries offers them significant growth potential.

Cons:

1. A notable issue is their dependency on a limited set of major clients.

2. Profits are susceptible to fluctuations in raw material costs.

3. The IPO’s elevated valuations might raise some concerns.

Purpose of the offer:

Fresh Issue (240 Cr.) – To secure funds for expansion, settling specific borrowings, and general corporate needs.

Offer for Sale (500 Cr) – Rakesh Chopdar, Piramal Structured Credit Opportunities Fund, and DMI Finance Private Limited are divesting part of their holdings.

Azad Engineering Ltd Anchor Investors List