Azad engineering makes strong debut in stock market

The auto component maker, Azad Engineering, backed by cricketer Sachin tendulkar , has made a healthy debut on the stock market exchange at a premium of 37 percent over the issue price. Still it falls down marginally at Rs705 on BSE.

Initially, the IPO of Azad Engineering received a good response from investors by gaining around 80.6 times subscription at close. The category reserved for QIB was subscribed the most at 179 times, followed by NIIs at 87 times. Further, the retail part received 23.7 times the bid.

The issue for fresh equity was Rs 240 crore and for an offer for sale [OFS] it was Rs 500 crore. The company is engaged in the manufacturing of qualified product lines supplying to global original equipment manufacturers in the aerospace and defence, energy and oil and gas industries.

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In addition to this, it makes complex and highly engineered precision forged and machined components that are exceptionally life critical, making the product having zero parts per million defects requirements. On considering the company's revenue the operations has risen 31 percent year-on-year to Rs 261 crore, while net profit for the same period fell 71 percent to Rs 8.4 crore.

The revenue of the company grew at a CAGR of 43 percent between FY21 and FY23 and PAT margin grew at a CAGR of 49 percent in the same period. While, the book running lead managers to the issue are Axis Capital, ICICI Securities, SBI Capital Markets and Anand rathi.

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While the closing shares were slow down with marginal rate, the GMP of the company is still showing promising returns for particular investors. It is expected that the share price will be 40 percent higher than the price band of the IPO, as predicted by the grey market premium of the firm. The worth of the IPO was at Rs740 crore with OFS at Rs500 crore.

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