Seven things to know about the Harsha Engineers Ltd IPO

Here are the seven things you must be knowing about the forthcoming IPO of Harsha Engineers International Ltd.

    1. IPOs have been slow to come and the good thing is that they appear to have started. In the last couple of weeks, we saw the IPOs of Syrma SGS Technology, Dreamfolks Services and Tamilnad Mercantile Bank getting good to fabulous response. The latest to announce its IPO date is Harsha Engineers International Ltd, a manufacturer of precision bearing cages based out of the state of Gujarat. The IPO will be a fresh issue and an offer for sale combined into one. Now Harsha Engineers International Ltd has announced granular details of the IPO.

    2. The total size of the issue will be around Rs755 crore. The company has set the price band of Rs314 to Rs330 a share for its IPO. The IPO will open for subscription on September 14th and the IPO will close on 16th September, with both the days being inclusive. The basis of allotment will be finalized on 21st September while the refunds will be initiated on 22nd September. The company will ensure that the credit to the demat accounts of eligible shareholders is completed by 23rd September so the IPO can be listed on 26th September.

    3. The total size of the IPO of Harsha Engineers International Ltd will be Rs755 crore, which will comprise of a fresh issue of Rs455 crore and an offer for sale (OFS) of up to Rs300 crore by the early shareholders and the promoters of the company. Among the promoter group taking an exit in the OFS, Rajendra Shah will offload shares worth Rs66.75 crore, Harish Rangwala will offload to the tune of Rs75 crore, Pilak Shah up to Rs16.50 crore, Charusheela Rangwala to the extent of Rs75 crore while Nirmala Shah will sell up to Rs66.75 crore in OFS.

    4. While the OFS portion will be used to give an exit to the promoter family, the fresh issue portion of Rs455 crore will be applied to the company future plans. Out of the total Rs455 crore raised, a total of Rs270 crore will be used for paying the high cost debt of the company. In addition, Rs77.95 crore will be utilized for purchasing machinery and equipment while another Rs 7.12 crore will be applied for infrastructure repairs and renovation of the existing facilities, apart from allocation for general corporate proposes.

    5. Harsha Engineers International Ltd is based out of Ahmedabad, in Gujarat. Earlier in 2018, the company had announced plans to go public but had shelved the plans amidst adverse market conditions. Harsha Engineers International Ltd was founded by Rajendra Shah and Harish Rangwala in 1986, with promoters holding 99.7% equity of the company. Harsha offers a diverse suite of precision engineering products across geographies catering to automotive, aviation, aerospace, railways, construction, mining, renewable energy etc.

    6. Harsha Engineers International Ltd has a total of 5five manufacturing facilities, of which 3 are located in Gujarat with one each located in China and Romania. It has a 50% share of the organized market for bearing cages in India while its global market share is around 5.2%. For the FY22 period, Harsha Engineers International Ltd reported net profits of Rs91.94 crore on total sales revenues of Rs1321.48. The company has net debt (net of cash) standing at Rs356.59 crore. Much of this debt would be repaid post the IPO.

    7. For retail applications, the minimum application is 1 lot of 45 shares worth Rs14,850 and a maximum of 13 lots of 585 shares worth Rs193,050 shares. Within the NII segment, the small HNI segment can invest between 14 lots and 67 lots where each lot consists of 45 shares each. Big HNIs or B-HNIs can invest in 68 lots and above. The issue of Harsha Engineers International Ltd will be lead managed by Axis Capital, Equirus Capital and JM Financial Consultants. Link Intime India will be the registrars to the issue.