10 Things To Know About Azad Engineering IPO Before Subscribing

Azad Engineering has launched its issue on Wednesday, December 20, and will be available to subscribe for till December 22, 2023. The price band for the issue has been fixed at Rs 499-524 per share. The ₹740-crore issue consists of a combination of fresh shares of ₹240 crore by the company and an offer-for-sale of shares worth ₹500 crore by existing shareholders. The company aims to channel the fresh issue proceeds into strategic avenues. Azad Engineering plans to allocate ₹60.4 crore towards acquiring plant and machinery, alongside a significant portion of ₹138.19 crore for debt repayment. Investors looking to participate in this offering should note that the minimum bid stands at 28 equity shares, with subsequent multiples of 18 shares. This sets the minimum investment for retail investors at ₹13,972 at the lower price band and ₹14,672 at the upper end. Established in 1983, Azad Engineering has four state-of-the-art manufacturing facilities in Hyderabad, Telangana, catering primarily to original equipment manufacturers (OEMs) in the aerospace, defence, energy, and oil and gas sectors. Azad Engineering experienced financial volatility, witnessing a 71.2 percent year-on-year decline in net profit, amounting to Rs 8.5 crore for the quarter ending March FY23. This decline was attributed to a weak operating margin and elevated finance costs. Despite this, revenue from operations for the same period grew 29.4 percent, reaching Rs 251.7 crore. EBITDA increased by 16 percent to Rs 72.3 crore, however, the margin saw a decrease of 330 basis points, settling at 28.7 percent compared to the preceding fiscal year.