The shares of Harsha Engineers are trading at a premium of Rs 190-200 per share or about 60 per cent in the unofficial market over the IPO price band of Rs 314-330, which the company announced earlier today.
The company is looking to raise Rs 755 crore, which consists of a fresh issue of shares worth Rs 455 crore and an offer for sale (OFS) by promoters of Rs 300 crore.
Analysts tracking the grey market are citing sound fundamentals, growth prospects, higher market share and reasonable valuations as reasons behind lofty valuations.
Abhay Doshi, Co-founder, Unlisted Arena, said the company has strong fundamentals with a sound balance sheet, supported by growing topline and bottomline.
“The company has more than 50 per cent of market share in India, whereas it is rapidly growing at the global level. International facilities are supporting the margins for the company,” Doshi added.
Ahmedabad-based Harsha Engineers has five manufacturing facilities with two facilities at Changodar and one at Moraiya, near Ahmedabad in Gujarat, and one manufacturing unit each at Changshu (China) and Ghimbav Brasov (Romania).
It claims to have a 50 per cent market share in the organised segment of the Indian bearing cages market and a 5.2 per cent market share in the global organised bearing cages market for brass, steel and polyamide cages as of 2020.
Dinesh Gupta, co-founder of UnlistedZone said the company is launching its shares at reasonable valuations compared to peers. “It has left something on the table for investors.”
However, these are just initial trends and one should wait for the bidding process for the IPO to conclude, said analysts.
Harsha Engineers offers a diverse suite of precision engineering products across geographies and end-user industries, including automotive, aviation and aerospace, railways, construction, mining, renewable energy, agriculture and more.
The company, which serves in more than 25 countries, recorded a profit of Rs 91.94 crore on revenue of Rs 1321.48 crore for the year ended March 2022, with a net debt for the period at Rs 356.59 crore.
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