Azad Engineering IPO has been subscribed 8.88 times so far on the second day of bidding, December 21, with bids for 9 crore shares against issue size of 1.01 crore shares. Retail investors bought 9.66 times and high net-worth individuals picked 18.15 times the allotted quota, while qualified institutional buyers picked 44 percent shares of the reserved portion.
The Rs 740 crore public offer which will close on December 22, comprises fresh issue of shares worth Rs 240 crore and an offer for sale of shares worth Rs 500 crore by the stakeholders. The price band for the issue had been fixed at Rs 499-524 per share with a lot size of a minimum of 28 equity shares followed by multiples of 28.
Of the fresh issue proceeds, the company will spend Rs 60.4 crore for buying plant and machinery and repaying debt of Rs 138.19 crore, the offer document said. The company’s borrowings stood at Rs 154.2 crore in the September quarter. The remaining funds will be used for general corporate purposes.
Azad Engineering’s net profit declined 71.2 percent from the previous year to Rs 8.5 crore in FY23. This decline was attributed to a weak operating margin and elevated finance costs. Revenue from operations, however, grew 29.4 percent to Rs 251.7 crore. EBITDA was up 16 percent to Rs 72.3 crore but the margin dropped 330 basis points.
Axis Capital Limited, ICICI Securities Limited, SBI Capital Markets Limited and Anand Rathi Securities Limited are the lead managers to the IPO, while Kfin Technologies Limited is the registrar.