Azad Engineering IPO: Issue Fully Subscribed on Day 1

20 Dec 2023 , 01:00 AM

Azad Engineering, in its debut in the stock market, saw a subscription of 1.32 within the first few hours of its Rs 740-crore initial public offering (IPO) opening on December 20. Investors bid for 1.35 crore shares against the total issue size of 1 crore. Click here to subscribe the IPO.

The retail segment exhibited strong demand, with 1.67 times of the allotted portion booked, while high net-worth individuals subscribed to 2.30 times of their quota. Qualified institutional buyers had yet to participate in the offering.

The company has also reserved a portion for its employees which have been booked 88% by the time.

Scheduled to close on December 22, the IPO comprises fresh issuances of shares worth Rs 240 crore and an offer-for-sale (OFS) of shares worth Rs 500 crore by existing stakeholders. The price band is set at Rs 499-524 per share, with a lot size of 28 equity shares and multiples thereof.

From the net proceeds of the fresh issue, Azad Engineering plans to allocate Rs 60.4 crore for the acquisition of plant and machinery and repay debts amounting to Rs 138.19 crore. The remaining funds will be earmarked for general corporate purposes.

In the September quarter, the company’s borrowings stood at Rs 154.2 crore. Azad Engineering reported a net profit of Rs 8.5 crore in FY23, marking a 71.2% decline from the previous year, attributed to a weak operating margin and elevated finance costs.