Azad Engineering IPO - Subscribe For Listing Gains: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Azad Engineering Ltd.'s launched its initial public offering on Dec 20 and the offer will be concluded on Dec 22. The manufacturer of critical high-precision components has fixed a price band in the range Rs 499 to Rs 524 . The minimum order lot is 28 shares. The Rs 740 crore IPO consists of fresh issue of Rs 240 crore and Rs 500 crore offer for sale (by promoter and investors), which would result in promoter stake reducing to 65.9% (78.6% pre-IPO). The market value at upper end of price band will be Rs 3100 crore..View: We like Azad Engineering given its presence in the high growth niche segment with high entry barriers, diversified product/client portfolio and robust financials. It would benefit from industry tailwinds especially in A&D space which could improve its revenue mix. IPO is priced at 57.6 times H1 FY24 price/earning (on an annualized and diluted basis). We recommend 'Subscribe' for listing gains, given its unique business model and buoyant primary market..Risk and concerns Top five customers contributed 61% of H1 FY24 revenues. Cancellation by customers or reduction in their orders could have adverse effect on the business. Azad Engineering derives the entire portion of its revenue from its Hyderabad, Telangana facilities. Any disruptions, breakdown or shutdown of facilities could have adverse effect on the business.Top five suppliers account for 83% of total raw material purchase. Cancellation by any supplier or reduction in their supply could have adverse effect on the business. 90% of its revenue comes from export..Click on the attachment to read the full report:.Azad Engineering IPO Subscribed 11.09 Times On Day 2.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Azad Engineering IPO - Subscribe For Listing Gains: Motilal Oswal

The Rs 740 crore IPO consists of fresh issue of Rs 240 crore and Rs 500 crore offer for sale (by promoter and investors), which would result in promoter stake reducing to 65.9% (78.6% pre-IPO).

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Azad Engineering IPO - Subscribe For Listing Gains: Motilal Oswal

The Rs 740 crore IPO consists of fresh issue of Rs 240 crore and Rs 500 crore offer for sale (by promoter and investors), which would result in promoter stake reducing to 65.9% (78.6% pre-IPO).

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