Sachin Tendulkar-backed Azad Engineering's IPO was open for bidding between December 20 to December 22, which was sold in the range of Rs 499-524 apiece
SUMMARY
Azad Engineering IPO was sold between December 20-22
It sold shares in the range of Rs 499-525, lot size 28 shares
Grey market premium corrects, listing on Thursday, Dec 28
Azad Engineering shares are set to make their Dalal Street debut on Thursday but the company has seen a sharp correction its grey market premium after a series of lesser-than-expected listing pops in the latest two trading sessions and thin trading volumes ahead of the new year.
Last heard, Azad Engineering was commanding a grey market premium of Rs 180-190 apiece in the grey market, suggesting a listing pop of more than 35 per cent of issue price of Rs 524 apeice. However, the premium in the unofficial market stood at Rs 300 about a day earlier and at Rs 440 apiece before the bidding for the issue kicked off.
Sachin Tendular-backed Azad Engineering's IPO was open for bidding between December 20 to December 22, which was sold in the range of Rs 499-524 apiece with a lot size of 28 equity shares. The company raised a total of Rs 740 crore, including a fresh share sale of Rs 240 crore and an offer-for-sale (OFS) of up to 95,41,985 equity shares.
The issue was overall subscribed a stellar 80.65 times as the portion for qualified institutional bidders (QIBs) was booked a whopping 179.66 times, while the non-institutional investors' category was subscribed 87.61 times. The quota reserved for retail investors and employees was subscribed 23.79 times and 14.71 times, respectively during the bidding process.
With the streak of IPOs coming into the markets in the past few weeks and having a robust opening on its listing day, and analysts believe that Azad Engineering too will follow the herd. Tuesday's listings of Muthoot Microfin, Suraj Estate Developers and Motisons Jewellers, followed by Wednesday's debuts of Credo Brands, Happy Forgings and RBZ Jewellers disappointed the street.
The company enjoys the moat as it is one of the key manufacturers of highly engineered, complex, and mission and life-critical components and supplies to global OEMs primarily engaged in highly regulated industries, including energy, aerospace, defense, and oil and gas industries,s aid Shreyansh V Shah, Research Analyst at StoxBox
"This led to the IPO receiving a strong 83x oversubscription and we expect a positive listing for the issue when it lists on the bourses on Thursday. We advise the investors who have been allotted the shares to hold it for the long term as the company's capex will improve its topline going forward," he said.
Azad Engineering, Incorporated in 1983, is a manufacturer of aerospace components and turbines. The company supplies its products to original equipment manufacturers (OEMs) in the aerospace, defense, energy, and oil and gas industries. Azad Engineering's products are highly engineered, complex, mission-critical, and vital.
As per the RHP filed by the Azad Engineering, Sachin Ramesh Tendulkar invested roughly about Rs 5 crore in the company in March 2023. He picked up 14,607 equity shares at a price of Rs 3,423 in the company, which were later turned in to 3,65,175 equity shares post stock split and bonus issue. The average price of Sachin's holding came out to Rs 136.92 apiece.