Azad Engineering gets Sebi nod for its ₹740 crore IPO; check details here
Azad Engineering Limited has received the final observations from the market regulator Securities and Exchange Board of India (SEBI) for its proposed initial public offering (IPO).
Azad Engineering is one of the key manufacturers of their qualified product lines supplying global original equipment manufacturers (“OEMs”) in the aerospace and defense, energy, and oil and gas industries, manufacturing highly engineered, complex, and mission and life-critical components. The company manufactures complex and highly engineered precision forged and machined components that are mission and life-critical and hence, some of their products have a “zero parts per million” defects requirement.
The company received its final observation letter from Sebi today, December 14, 2023. It had filed a Draft Red Herring Prospectus (DRHP) with SEBI on September 29, 2023
The company’s initial public offering comprises a fresh issue of up to ₹240 crore and an offer for sale (OFS) of equity shares of face value of ₹2 each aggregating up to ₹500 crore. Hence, the total issue size stands at ₹740 crore
The offer for sale comprises of sale of equity Shares worth ₹170 crore by Rakesh Chopdar and ₹280 crore by Piramal Structured Credit Opportunities Fund and ₹50 crore by DMI Finance Private Limited.
The company proposes to utilize the Net Proceeds from the offer towards Funding capital expenditure of the company, repayment/pre-payment, in full or part, of certain borrowings availed by the Company, and general corporate purposes.
Axis Capital Limited, ICICI Securities Limited, SBI Capital Markets Limited and Anand Rathi Advisors Limited are the Book Running Lead Managers to the issue.
Azad Engineering competes with manufacturers from China, Europe, the USA and Japan. Their customers include global OEMs across the aerospace and defense, energy, and oil and gas industries such as General Electric, Honeywell International Inc., Mitsubishi Heavy Industries, Ltd., Siemens Energy, Eaton Aerospace and MAN Energy Solutions SE.
Azad Engineering’s components have been supplied to countries such as the USA, China, Europe, the Middle East, and Japan since their inception. Accordingly, they are a key link in the global supply chain for OEMs. The company has increased its revenue from ₹124 crore in FY20 to ₹252 crore in FY23 (CAGR of 27 percent between FY20 and FY23) with an adjusted EBITDA margin of 31.61 percent in FY23.
Azad Engineering is one of the fastest growing manufacturers (in terms of revenue growth for the period between Financial Years 2020 – 2023) with one of the highest EBITDA margins among the key players for machined components for the key industries serviced by them.
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Published: 14 Dec 2023, 02:15 PM IST
