Punjab-based GNA Axles Limited initial public offer (IPO) will hit capital markets on Wednesday (September 14). The company was incorporated in 1993 by Jasvinder Singh Sehra, Ranbir Singh and Gurdeep Singh. Brokerage firm KR Choksey Shares and Securities is bullish on the IPO.
The company is engaged in the business of manufacturing rear axle shafts and spindles. Company’s products are used in vehicular segments like commercial vehicles (CVs) – LCVs, MCVs & HCVs & buses (on highway) and agricultural tractors & machinery, forestry, construction equipments, electric carts and other specialty equipments (off highway).
GNA Axles has two manufacturing facilities in Punjab, Unit I – Mehtiana (Hoshiarpur District); spread over 21.04 acres and Unit II –Gulabgarh Jattan (Kapurthala District) spread over 9.62 acres. It exports to companies spread across 13 countries in 5 continents including USA, Brazil, Sweden, Italy, Turkey, Germany, Japan, Mexico, Spain, UK, France, China and Australia.
The company has a sustained financial position with topline figures growing at a CAGR (compounded annual growth rate) of 6.3 per cent in the past 5 years, driven by exports (around 19.2 per cent CAGR in 5 years). KR Choksey believes, GNA Axles to deliver and continue its growth momentum on account of diverse product range of axle shafts and spindles, strong long term customer relationships, experienced management and skilled employee base.
The brokerage house in a research note said, “At price band of Rs 205- Rs 207, GNA Axles public offer comes at a price-to-earnings ratio of 16.92 times and 17.02 times respectively on FY16 diluted earnings per share of Rs 12.11, which is fairly priced to its nearest peer (Talbros Automotive Components Ltd around 17.53 times), given the improving export share, revival in domestic demand and implementation of BS norms, we advise investors to subscribe the IPO and remain invested in GNA’s long term story.”
The issue will close on September 16.