Azad Engineering IPO, GMP, Lot Size, Listing Date

Azad Engineering IPO, GMP, Lot Size, Listing Date: Know Details

About Azad Engineering

Azad Engineering Limited was founded in 1983 and manufactures precision machined and forged parts for the aerospace, defense, and energy sectors.

It is one of the top producers of suitable goods, such as mission-critical and intricate components, that are supplied to original equipment manufacturers all over the world (OEMs). The company is headquartered in Hyderabad and operates four manufacturing facilities. Strict standards, such as "zero parts per million" failures, apply to some of the company's parts.

The corporation faces competition from clients in Europe, the US, China, and Japan. Azad Engineering counts General Electric, Honeywell International Inc., Mitsubishi Heavy Industries Ltd., Siemens Energy, Eaton Aerospace, and MAN Energy Solutions SE as its well-known clientele.

Azad Engineering IPO

IPO for Azad Engineering Limited is scheduled to begin on December 20, 2023, and run until December 22, 2023. The company is in the business of producing highly accurate machined and forged parts for the aerospace, defense, and energy sectors.

A new issue of 4,580,153 shares valued at Rs.240 cr and an offer-for-sale (OFS) of 9,541,985 shares valued at Rs.500 cr are both included in the IPO. Rs.740 cr is the total size of the IPO.

December 26 is the date of share allotment, and on December 28, the initial public offering (IPO) will be listed on stock exchanges. The lot size is 28 shares, and the price range is Rs.499 to Rs.524 per share.   

The book-running lead managers for this IPO are Axis Capital Limited, ICICI Securities Limited, SBI Capital Markets Limited, and Anand Rathi Advisors Limited.

Azad Engineering, which has its headquarters in Hyderabad, Telangana, provides its goods to original equipment manufacturers (OEMs) in the oil and gas, aerospace, defense, and energy sectors. Its goods are essential, intricate, mission-critical, and well-engineered.

The primary goal of Azad Engineering's initial public offering (IPO) is to raise money for working capital needs,To pay back borrowed funds in full or in part and for general business purposes.

Dates of the Azad Engineering IPO:

The IPO will begin accepting subscriptions on December 20 and end on December 22, 2023. On December 26, the IPO allotment is anticipated to be completed.

Details of Azad Engineering's IPO:

The IPO issue size of Azad Engineering is Rs.740.00 crore. The issuance consists of an offer for sale (OFS) of 95 lakh shares, totaling Rs.500 crore, and a fresh issue of 46 lakh equity shares, totaling Rs.240 crore.

Azad Engineering IPO Price Band:

The pricing range for Azad Engineering's IPO is Rs.499 to Rs.524 per share.

Azad Engineering IPO Lot Size:

The size of the Azad Engineering IPO lot is 28 shares, and retail buyers must invest a minimum of Rs.14,672 to participate.

Listing for the Azad Engineering IPO

The BSE and NSE stock exchanges will host the initial public offering (IPO) of Azad Engineering, with a provisional listing date of December 28.

The objectives of Azad Engineering's initial public offering (IPO):

To use the net proceeds of the new issue to finance capital expenditures, the repayment or prepayment of some loans, and general corporate purposes.

Azad Engineering Reservations for the IPO:

In the first public offering (IPO), the business has set aside 50% of the shares for Qualified Institutional Buyers (QIB), 35% for Retail Investors, and 15% for Non-Institutional Investors (NII).

Azad Engineering IPO Lead Managers and Registrar:

Kfin Technologies is the IPO registrar, and Axis Capital, ICICI Securities, SBI Capital Markets, and Anand Rathi Securities are the book running lead managers.

 Review of Azad Engineering's IPO:  

With a virtual monopoly, Azad Engineering is a niche player in its industry. Throughout the reporting periods, the company's revenue increased steadily. It seems that the Azad Engineering IPO issue is fully priced based on FY24 annualized earnings. Analysts stated that investors can purchase the issue for a medium- to long-term duration given the company's promising potential.

About Azad Engineering IPO GMP:

Trading in the grey market price (GMP) typically begins four to five days before the IPO opens and lasts until the listing day. Regarding Azad Engineering Ltd., we currently possess GMP data over the previous four days, which ought to provide a decent representation of the anticipated IPO listing price.

The GMP is impacted by two things. First, the GMP is greatly impacted by the state of the market, particularly by the liquidity circumstances therein. Second, as a measure of investor interest in the stock, the IPO's level of subscription has a significant effect on the GMP. Technically, GMP may even be negative, in which case the stock would list below the issue price.

According to market watchers, Azad Engineering's IPO GMP, or grey market premium, is currently Rs.440 per share. This shows that the shares of Azad Engineering are trading on the grey market at Rs.964 per, which is 83.97% more than the issue price.

Azad engineering IPO buy or not:

Some concerning points:

• Although sales have increased steadily over the past three years, the newest year's profits decreased, primarily due to a dramatic increase in labor and staff expenditures.
• The most recent year's PAT margins and ROE might be a little deceptive because of the steep decline in profits brought on by an increase in labor expenses.
• The company's asset sweating is modest, but given that many of the investments must be front-ended, that should change in the upcoming quarters. Still, the robust ROA would more than offset that; once more, FY22 is being considered rather than FY23.

Certain qualitative elements:

• Long-standing and close client connections with some of the most prestigious original equipment manufacturers (OEMs) in the world
• The company is a chosen partner in the highly complicated engineering solutions for the defense, aerospace, and hydrocarbon industries.

Investors need to understand that while the IPO carries a greater valuation, this may be readily justified by the company's distinctive positioning and projected profit margins over the next two years. This is ideally a long-term niche play into an industry that supports the defense, aerospace, and hydrocarbons sectors, which are all experiencing rapid expansion and attention. With a 2-3 year time horizon, investors can take this stock very seriously as a proxy for the enormous latent demand for these product segments.

Some Major Points to Know

1. From 2021 to 2023, revenue increased steadily, suggesting strong sales performance.
2. Profit After Tax, or PAT, increased significantly between 2021 and 2022 but decreased in 2023, suggesting some volatility in profitability.
3. The business has continuously maintained a high gross profit margin, which suggests effective cost control.

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Frequently Asked Question

What is the minimum investment and lot size needed to participate in the Azad Engineering IPO?

28 shares are the minimum lot size for the Azad Engineering IPO, and Rs.13,972 is the needed investment.

What is the Azad Engineering IPO allotment date?

The date of the Azad Engineering IPO's share allotment is December 26, 2023.

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What is the Azad Engineering IPO aiming to achieve?

The public issue's earnings will be utilized to:

• Pay for the necessary working capital.
• To pay back any borrowed funds in full or in part upfront.
• The corporate purpose in general.