Harsha Engineers IPO: Apply or skip? Here's what Anil Singhvi, experts recommend

Harsha Engineers IPO subscription, The three-day initial public offering (IPO) of Harsha Engineers International Limited, which opened on Wednesday (Sep 14), will close on Friday (September 16). Harsha Engineers International Limited IPO was subscribed over five times so far on the second day of the subscription. The issue received bids for 8,75,14,335 shares against 1,68,63,795 share on offer.  

Harsha Engineers IPO: What should investors do?  

As the issue entered the second day of the subscription, Zee Business Managing Editor Anil Singhvi was very bullish on Harsha Engineers IPO and he recommended to apply for the issue.  

Talking about positive of the company, Zee Business Managing Editor said the company boasts of combination of new and experienced promoters with clean track record, has strong financials and growth outlook. "It is also almost a debt-free company with attractive valuations. Apply for both big listing gain and long-term," he said while listing positives of the company   

Singhvi said exposure to Europe, China and USA is huge at 57% of its revenue, which is the only negative for this company. 

Earlier, Aayush Agrawal, Senior Research Analyst, Swastika Investmart Ltd, also recommended to subscribe the IPO.  

The company has managed to garner a lion-sized share in the Indian bearing cages market due to its first mover advantage as the company was the first player to persuade bearing players to outsource the cage manufacturing than producing it in-house, he said.  

He further said that the ability to provide customized solutions, wide product offerings, and focus on quality & on-time delivery has entrenched their relationship with their customers.  

Additionally, the strategic location of their facilities has enabled them to penetrate global markets more efficiently and cost-effectively, said Aayush Agrawal.  

"The issue has been priced at a P/E of ~32.67, which appears to be fully priced in; nevertheless, the company is a proxy play on India becoming a global manufacturing hub theme, and considering the positive growth outlook, experienced first generation management team and competitive advantages, we have assigned “SUBSCRIBE” rating to the issue," added the expert. 

LKP Securities in its IPO note also suggested applying for Harsha Engineers IPO. At the higher price band of ₹330, HEIL is valued at 27.7x FY22 earnings of ₹11.9, which in our view is reasonable compared to its peers, it said.  

"The company with its strong market share in precision bearing cages and being one of the leading players globally in organized bearing cages, having strong clientele with long standing relationship provides healthy return ratios and visibility going ahead. We recommend investors to SUBSCRIBE to the IPO," it added. . 

The company’s products find their application in the automotive, railways, aviation & aerospace, construction, mining, agriculture, electrical and electronics, renewables sectors, etc. The government’s thrust on infrastructure, agriculture reforms, the revival of private CAPEX, and rising housing & real estate demand augurs well for the aforementioned sectors and the company’s prospects. 

Harsha Engineers IPO Details

The total IPO size is worth Rs 755 crore, which comprises fresh issue of Rs 455 crore and open offer for sale of Rs 300 crore.  

As per Harsha Engineers International Limited DRHP, the company has fixed a price band of Rs 314-330 for the issue that opens tomorrow. The IPO lot comprises 45 shares and in multiple thereof.  

The retail allocation has been capped at 35% for Harsha Engineers IPO, shares of which will be listed on both the exchanges—National Stock Exchange (NSE)and BSE. It also has employees reservation to the tune of Rs 2.50 crore of the IPO. The employees will be given a discount of Rs 31 per share, as per LKP Securities.