Azad Engineering Limited Makes Impressive Stock Market Debut with a 37% Premium

28 Dec 2023 , 09:55 AM

Azad Engineering Limited, a manufacturer of aerospace components and turbines, marked a stellar entry on Dalal Street as its shares were listed at Rs 710 on NSE, reflecting a significant premium of 37.40% over the issue price of Rs 524 per share. The debut on BSE was equally impressive, with shares opening at Rs 710, indicating a premium of 35.50%.

The company’s initial public offering (IPO) witnessed robust demand from investors, with an oversubscription of 80.6 times. Qualified institutional buyers (QIBs) were particularly bullish, subscribing 179.66 times their allotted quota. High net worth individuals (HNIs) and retail investors also showed strong interest, subscribing 87.55 times and 23.71 times, respectively.

Azad Engineering plans to utilize the fresh issue proceeds strategically. A significant portion, amounting to Rs 60.4 crore, will be allocated for the purchase of plant and machinery, enhancing the company’s operational capabilities. Additionally, a substantial sum of Rs 138.19 crore will be used to repay existing debts, contributing to a stronger financial position. As of September 2023, the company’s borrowings stood at Rs 154.2 crore. The remaining funds from the IPO will be utilized for general corporate purposes.

The Rs 740-crore IPO comprises a combination of fresh shares worth Rs 240 crore by the company and an offer-for-sale of shares amounting to Rs 500 crore by existing shareholders.