Harsha Engineers is listing at a 36% premium amid volatile market conditions

Ahmedabad-based Harsha Engineers International, which manufactures precision bearing cages, was trading at ₹ 450 on the bourse on Monday, amid volatile market conditions.

Investors made a profit of ₹120 per share and ₹5,400 per allotment of the IPO. The company’s market capitalization stands at ₹ 4,096 crore, according to BSE data.

Despite some weakness in the market, analysts predicted a strong share price for the company due to its strong fundamentals and strong gray market premium.

“We believe that the company can surprise the markets and that it could make a big debut and place itself above the premium in the gray market. The company’s strong fundamentals, competitive advantages such as high entry barriers and switching costs, an experienced management team and a robust growth outlook explain a healthy GMP. In addition, the company is a proxy for India becoming a global manufacturing hub,” said Aayush Agrawal, Principal Research Analyst, Swastika Investmart.

The IPO was subscribed a whopping 74.70 times amid volatile market conditions. The subscription by qualified institutional investors was 178 times the IPO offer, while the retail portion of the IPO saw a subscription of 17.63 times the offer.

The money raised through the IPO will be used to repay debt, finance capital expenditures, purchase machinery, repair infrastructure, renovate existing manufacturing facilities and general corporate purposes.

The company’s business includes two segments – engineering and solar EPC. Its engineering division produces bearing cages from brass, steel and polyamide materials; complex and specialized precision molded parts; welded assemblies and brass castings, among others.

The company’s profit has more than quadrupled over the last three financial years.

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