On the second day of bidding, December 21, bids for 11.22 crore shares against an issue size of 1.01 crore shares resulted in an 11.09 times subscription to the Azad Engineering IPO. High net worth individuals selected 23.49 times the authorized quota, retail investors purchased 11.15 times, while qualified institutional purchasers selected 1.53 times the shares of the reserved fraction.
The Rs 740 crore public offer, which ends on December 22, consists of a fresh share issue valued at Rs 240 crore and an offer by stakeholders to sell shares valued at Rs 500 crore. The minimum lot size for the issue was 28 equity shares, followed by multiples of 28, and the price range was set at Rs 499–524 per share.
According to the offer document, the company will use the proceeds from the fresh issuance to pay down its debt of Rs 138.19 crore and purchase plant and machinery totaling Rs 60.4 crore. In the September quarter, the company owed Rs 154.2 crore in debt. The money that is left over will be applied to basic business needs.
In FY23, Azad Engineering’s net profit was Rs 8.5 crore, a 71.2 percent decrease from the previous year. High financing expenses and a poor operating margin were blamed for this fall. On the other hand, operating revenue increased by 29.4% to Rs 251.7 crore. Although the margin fell by 330 basis points to Rs 72.3 crore, EBITDA increased by 16 percent.
The registrant for the IPO is Kfin Technologies Limited, while the lead managers are Axis Capital Limited, ICICI Securities Limited, SBI Capital Markets Limited, and Anand Rathi Securities Limited.
