Harsha Engineers which is a leading manufacturer of precise bearing cages is all set to launch its IPO of size 755 CR. The company has allocated 50% of the offer to qualified institutional buyers (QIBs), 35% to retail investors, and 15% to non-institutional investors. The offer also includes a subscription reservation for eligible employees. Investors can place bids on a minimum of 45 shares at a price band of INR 314-330 per share.
Harsha Engineers IPO – Overview
Harsha Engineers International was subscribed 74.70 times on the last day of subscription, which ended on 16th SEP 2022 due to strong demand from institutional buyers. According to NSE data, the public issue received bids for 125.96 crore shares versus 1.68 crore shares on offer. Harsha Engineers International intends to raise Rs 755 crore through an IPO (IPO). It is made up of a new issue of equity shares worth Rs 455 crore and an offer-for-sale (OFS) by existing shareholders worth up to Rs 300 crore. Rajendra Shah, Harish Rangwala, Pilak Shah, Charusheela Rangwala, and Nirmala Shah will dilute their ownership as part of the OFS.
Harsha Engineers IPO –Tentative Dates
|IPO Issue Opening date||14-SEPTEMBER-2022|
|IPO Issue closing date||16-SEPTEMBER-2022|
|IPO Allotment Date||21st SEPTEMBER-2022|
|IPO Listing date||26-SEPTEMBER-2022|
|IPO PRICE||314 INR|
|IPO LISTED AT||NSE, BSE|
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Harsha Engineers–Industry Overview
The market for bearings was worth USD 85.2 billion in 2015 and was worth USD 106.1 billion in 2019 leading to a CAGR of 5.6%. The global Covid-19 outbreak caused supply chain restrictions and a drop in demand, which led to a contraction in the bearings market in 2020. However, a recovery was noted in 2021, and the market increased by 12% annually to USD 104.6 billion.
The market for bearings is anticipated to grow at a CAGR of 6% to 8% from 2021 to 2029 and is projected to reach a value of USD 171.7 billion. This growth is attributed to the anticipated increase in the usage of bearings in a variety of applications, including mining, automotive, heavy machinery, infrastructure development, power generation, and construction.
Harsha Engineers–Company Overview
Harsha Engineers International Limited is one of the top manufacturers of precise bearing cages in the world and the largest producer of such cages in the organised sector in India. For brass, steel, and polyamide cages the company is holding 50% of market share in the organised section of the Indian bearing cages market and 5.2% of the market share globally
The corporation runs its operations in two segment :
- Engineering business: This is where the company produces sophisticated and specialised precision stamped components, welded assemblies, brass castings, cages, and bronze bushings, as well as bearing cages (made of brass, steel, and polyamide materials).
- The company’s solar EPC division offers full, comprehensive turnkey solutions for all solar PV needs.
Harsha Engineers IPO Details
|Harsha Engineers IPO Date||Sep 14, 2022 to Sep 16, 2022|
|Harsha Engineers IPO Face Value||₹10 per share|
|Harsha Engineers IPO Price||₹314 to ₹330 per share|
|Harsha Engineers IPO Lot Size||45 Shares|
|Issue Size||shares of ₹10 (aggregating up to ₹755.00 Cr)|
|Fresh Size||shares of ₹10 (aggregating up to ₹455.00 Cr)|
|Offer for sale||shares of ₹10 (aggregating up to ₹300.00 Cr)|
|Employee Discount||Rs 31 per Equity Share|
|Issue Type||Book Built Issue IPO|
|Listing At||BSE, NSE|
|QIB Shares Offered||Not more than 50% of the Net Offer|
|NII (HNI) Shares Offered||Not less than 15% of the Net Offer|
|Retail Shares Offered||Not less than 35% of the Net Offer|
|Company Promoters||Rajendra Shah, Harish Rangwala, Vishal Rangwala, and Pilak Shah are the company promoters. |
Harsha Engineers– International Footprint
The company manufacturing facilities at Changodar and one at Moraiya, near Ahmedabad in Gujarat in India, and one manufacturing unit each at Changshu, China and Ghimbav Brasov in România. and the company supplies products to customers in over 25 countries covering five continents i.e., North America, Europe, Asia, South America and Africa. To help diversify its revenue, Harsha Engineers International has warehouses in over 20 countries around the world, including Europe, the United States, China, and South America.
Harsha Engineers IPO – Proceeds
The IPO proceeds would be utilised for the following purposes;
- Pre-payment or scheduled repayment of a portion of the existing borrowing availed by the Company.
- Funding capital expenditure requirements towards purchase of machinery.
- Infrastructure repairs and renovation of existing production facilities including office premises in India.
- General corporate purposes.
Harsha Engineers – Management
The management team of Harsha engineers has more than 25 years of combined industry expertise.
Harsha Engineers – Financial Statements
Harsha Engineers IPO –Strength
- Harsha Engineers has manufactured more than 7,500 types of products in the automotive and industrial segments
- Harsha Engineers Supplies products to customers in over 25 countries
- Around 64% of the engineering business revenue in FY22 came from outside India
- Supplies to each of the top six global bearing manufacturers
- The average age of its relationship with its top five customer groups spans more than a decade
Harsha Engineers IPO – Weakness
- Top five customers accounted for 71% of the revenue from the engineering business in FY22
- Around 94% of its revenue came from the engineering business in FY22
- Harsha Engineer operations require constant power supply and any disruption in the supply of power may affect manufacturing.
- Harsha Engineer is highly Exposed to foreign currency exchange rate fluctuations, which may adversely affect its revenue from operations.
- Reported a loss in FY19 and may incur additional losses in the future