The initial public offering (IPO) of Harsha Engineers International Ltd, will open tomorrow (14 September). The precision bearing cages manufacturer has set a price band of Rs 314-330 per share for its maiden public issue which will remain open for subscription till Friday, 16 September. The company plans to raise Rs 755 crore through this IPO. Harsha Engineers’ IPO consists of a fresh issue of Rs 455 crore and an offer for sale (OFS) of up to Rs 300 crore by shareholders and promoters. As part of the OFS, 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 Bidding details

– Face Value: Rs 10 per share
– Lot size: 45 shares
– Employee Discount: Rs 31 per share
– QIBs (Including Anchor): 50% of the offer (approx 1.14 crore shares)
– Non-Institutional: 15% of the offer (approx 34.2 lakh shares)
– Retail: 35% of the offer (approx 79.8 lakh shares)
– Employee: 83,610 shares
– Lead managers: Axis Capital, Equirus Capital, JM Financial
– Registrar to the issue: Link Intime India Pvt. Ltd.

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Harsha Engineers shares were commanding a grey market premium (GMP) of Rs 212 today, according to people who deal in unlisted stocks. The IPO shares are likely to be credited to successful allottees’ demat accounts on September 23 and the company is expected to make its market debut on September 26.

Should you subscribe to Harsha Engineers IPO?

Motilal Oswal: Subscribe for listing gains

According to analysts at Motilal Oswal Financial Services, Harsha Engineers with its dominant position is well placed to capture the growing bearing cage demand across industries. “We like its increasing focus on other specialised precision components and on the growing EV segment which could boost its EBITDA margins. It is valued at 32.7x FY22 P/E which is at par with its listed peers. Given growth recovery in auto/auto ancillary and strong momentum in the midcaps, we expect the IPO to do well. We suggest investors to Subscribe for listing gains,” they said.

Hem Securities: Subscribe

“Company is bringing the issue at a price band of Rs 314-330 per share at P/E multiple of 33x on post issue FY22 PAT basis. Company being a comprehensive solution provider offering diversified suite of precision engineering products across geographies and end-user industries has long standing relationships with leading clientele. Company’s strategically located domestic and international production facilities and warehouses & expertise in tooling, design development and automation with consistent track record of growth and financial performance is looking strong to us. Hence, looking after all above, we recommend “Subscribe” on issue.”

Angel One: Subscribe

In terms of valuations, the post-issue P/E works out to 32.7x FY22 EPS (at the upper end of the issue price band). Company’s consolidated PAT has grown at a CAGR of ~105% over FY20-22 on the back of margin expansion, according to Angel One IPO note. “Harsha Engineers has a diverse product portfolio and strong expertise; we believe that these positives are yet to be factored in the valuations commanded by the company. Thus, we have a SUBSCRIBE rating on the issue,” it said.

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LKP Securities: Subscribe

“At the higher price band of Rs 330, HEIL is valued at 27.7x FY22 earnings of Rs 11.9 which in our view is reasonable compared to its peers. The company with its strong market share in precision bearing cages and being one of the leading players globally in organised bearing cages, having a strong clientele with long standing relationships provides healthy return ratios and visibility going ahead. We recommend investors to SUBSCRIBE to the IPO.”

(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)