Securities and Exchange Board of India (SEBI) has granted approval to Telangana-based Azad Engineering for its Rs 740-crore initial public offering (IPO). The IPO comprises fresh shares totaling Rs 240 crore by the company and a Rs 500-crore offer-for-sale (OFS) of existing shareholders’ shares.
SEBI’s observation letter, issued on December 5, indicates the green light for Azad Engineering’s IPO, with a window of one year for the company to proceed with the offering. Promoter Rakesh Chopdar plans to divest shares worth Rs 170 crore in the OFS, while Piramal Structured Credit Opportunities Fund and DMI Finance will offload shares worth Rs 280 crore and Rs 50 crore, respectively.
Currently, promoters hold a controlling stake of 86.51 percent in Azad, leaving the remaining 13.49 percent with public shareholders. Piramal Structured Credit Opportunities Fund is a notable public shareholder, possessing 11.56 percent of the company’s shares.
Azad Engineering, specializing in the manufacturing of precision-forged and machined components, is exploring options to secure Rs 48 crore through private placements, rights issues, or preferential offers before filing the red Herring Prospectus with the Registrar of Companies (ROC). Any funds raised through pre-IPO placements will be subtracted from the fresh issue size accordingly.
