Azad Engineering, a company based in Telangana, successfully concluded its public issue on December 22, raising Rs 740 crore. The public offering witnessed an overwhelming response from investors, with a subscription rate of 80.6 times the offered shares during the period from December 20 to December 22. This strong demand came from a diverse group of investors, including qualified institutional buyers (QIBs), high net-worth individuals, retail investors, and employees.
Among these categories, QIBs took the lead by subscribing 179.66 times the allocated quota, showcasing significant institutional interest. High net-worth individuals and retail investors also participated enthusiastically, subscribing 87.55 times and 23.71 times, respectively, of the shares reserved for them. Even employees showed substantial interest, bidding 14.69 times the allotted portion.Grey market investors, operating in an unofficial capacity, have expressed strong optimism about the IPO, with Azad shares reportedly commanding a 75 percent premium over the upper price band.
Analysts, including Motilal Oswal and Mehta Equities, have expressed positive views on Azad Engineering. Motilal Oswal appreciates the company’s presence in a high-growth niche segment with significant entry barriers, a diversified product and client portfolio, and strong financials. Mehta Equities acknowledges that while the valuations are relatively high, the unique product profile, coupled with a demand for mission and life-critical components, along with 80 percent export revenue and a superior margin profile, justifies the premium.
The Azad IPO comprised a mix of a fresh issue of Rs 240 crore and an offer-for-sale (OFS) of shares worth Rs 500 crore. The offer price ranged between Rs 499 and Rs 524 per share. The proceeds from the fresh issue are earmarked for capital expenditure, debt repayment, and general corporate purposes, while the funds from the OFS will go to the selling shareholders.
