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The ₹740-crore IPO from Hyderabad-based Azad Engineering was subscribed over three times on Day 1 of the issue on Wednesday. The price band is ₹499-524, and investors can bid for a minimum of 28 equity shares.
The IPO received bids for 3.35 crore shares, against 1.01 crore shares on offer.
Several sports personalities, including Sachin Tendulkar, P.V. Sindhu, V.V.S. Laxman and Saina Nawal, have invested in the company.
About the offer
The market lot is 17 shares. The public issue comprises a fresh issue of ₹400 crore and an offer-for-sale (OFS) of up to 71.60 lakh shares worth ₹609 crore.
The quota set aside for retail investors was bid 3.93 times, while that for non-institutions was subscribed 6.13 times. The QIB portion was subscribed 0.45 times, and the quota reserved for employees was subscribed 2.06 times.
Issue details
The initial public offering comprises a fresh issue of ₹240 crore and an offer-for-sale of ₹500 crore by promoters and external investors, including Piramal Structured Credit Opportunities Fund and DMI Finance. While 50 per cent of the issue has been reserved for qualified institutional buyers, 15 per cent has been set aside for high networth individuals, and the balance 35 per cent for retail investors.
Anchor investors
The company raised ₹220.80 crore by allotting 42.13 lakh shares at ₹524 a share to anchor investors, including, Nippon Life India, Abu Dhabi Investment, ICICI Prudential, Nomura, Ashoka India Equity, Kotak Mahindra Mutual, Tata Infrastructure fund, Bandhan Infrastructure Fund, Edelweiss Mutual, HDFC Life Insurance, Bajaj Allianz, Max Life Insurance and Eastspring Investment India.
The company plans to use the issue proceeds to part-fund capital expenditure for its ₹280-crore expansion, by setting up two units towards the end of the next fiscal, and to repay/ pre-pay debt of around ₹90 crore.
Investors to stay invested
Even after the IPO, the company will continue to have external investors in the form of HNIs (High Networth Individuals) who include sport stars like Sachin Tendulkar, VVS Laxman, PV Sindhu and Saina Nehwal. Together, these HNIs and employees will own around 12 per cent in the firm.
About Azad Engineering
Azad Engineering is a niche manufacturer of product lines in the aerospace and defence, energy and oil and gas industries. It manufactures highly engineered, complex and mission and life-critical components. Some of its key products include 3D rotating air-foil portions of turbine engines and other critical products for defence and civil aircrafts, spaceships, defence missiles, nuclear power, hydrogen, gas power, oil, and thermal power.
In the energy space, the company boasts of international clients including Siemens Energy, General Electric, Honeywell International, Mitsubishi, Eaton Aerospace and MAN Energy Solutions.
The merchant bankers to the issue are Axis Capital, ICICI Securities, SBI Capital Markets, and Anand Rathi Advisors.
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