Initial public offering (IPO) by Harsha Engineers International is set to hit the capital market on September 14. The company has fixed a price band of Rs 314-330 and aiming to raise Rs 455 crore through the public offer. Harsha Engineers, incorporated in 2010, is the largest manufacturer of precision bearing cages in terms of revenue in organized sector in the country.
Brokerages including Arihant Capital, LKP Securities, Nirmal Bang Securities and Hem Securities have given ‘Subscribe’ rating to the issue, citing citing strong revenue growth and solid relationship with customers which will drive the business going ahead.
According to Nirmal Bang Securities, Harsha Engineers is bringing the issue at price-to-earnings multiple of 33 times on post issue FY22 PAT basis. “Company’s strategically located domestic and international production facilities and warehouses and expertise in tooling, design development and automation with consistent track record of growth and financial performance are looking strong to us. Hence, we recommend “Subscribe” on issue,” the brokerage said.
Arihant Capital Markets, who suggested subscribing the issue for long terms, added that Harsha Engineers has delivered strong revenue growth (22 per cent CAGR) in FY20-FY22. “Presence in 25 countries over 5 continents, comprehensive solutions to customers backed by strong R&D and strong relationships with customers will drive the business going forward,” Arihant Capital said.
Meanwhile, IPOWatch suggested that Harsha Engineers IPO grey market premium (GMP) was hovering around Rs 210 on September 13. It implies that the grey market is expecting the lender to list around Rs 540 (Rs 330 + Rs 210), which is over 60 per cent premium to the IPO’s upper band price of Rs 330 per equity share.
Since their incorporation, the company has manufactured more than 7,500 types of products in the automotive and industrial segments. Harsha Engineers has recently expanded their product portfolio to introduce sand-casting, value-added stamping components, bronze bushings to cater to more end user industries such as wind, mining and shipping sectors. Their products find application across automotive, aviation and aerospace, construction, mining, agriculture, electricals and electronics, renewables sectors.
LKP Securities in a report said, “The company with its strong market share in precision bearing cages and being one of the leading players globally in organised bearing cages, having strong clientele with long standing relationship provides healthy return ratios and visibility going ahead. We recommend investors to ‘Subscribe’ to the IPO.” The public offer will close on September 16, 2022.
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