Harsha Engineers International refiles DRHP with SEBI, to raise Rs 755 crore

Ahmedabad-based Harsha Engineers, largest manufacturer of precision bearing cages, in terms of revenue, in organised sector in India, has filed its draft red herring prospectus (DRHP) for its initial public offering (IPO). It had earlier filed its draft papers with the regulator in August 2018.

The offer consists of a fresh issue of equity shares aggregating to Rs 455 crore, and an offer for sale of up to Rs 300 crore by existing shareholders, according to the draft red herring prospectus (DRHP).

The offer of sale comprises up to Rs 66.75 crore by Rajendra Shah, up to Rs 75 crore by Harish Rangwala, up to Rs 16.50 crore by Pilak Shah, up to Rs 75 crore by Charusheela Rangwala, up to Rs 66.75 crore by Nirmala Shah. The offer also includes a reservation for subscription by eligible employees.

Proceeds from the fresh issue will be utilised to the tune of up to Rs 270 crore for part repayment/pre-payment of loans availed from lenders, up to Rs 77.95 crore for funding working capital requirements towards purchase of machinery, up to Rs 7.12 crore for infrastructure repairs and renovation of the existing production facilities and general corporate proposes.

Founded in the year, 1986 by founder Promoters and Directors Harish Rangwala and Rajendra Shah have been in engineering business for last 35 years which primarily operate in the automotive, aviation & aerospace, railways, construction, mining, renewable energy, agriculture and other industrial sectors.

The Company offers a wide range of bearing cages starting from 20 mm to 2,000 mm in diameter. It has approximately 50% of the market share in the organised segment of the Indian bearing cages market and 5.2% of the market share in the global organised bearing cages market for brass, steel and polyamide cages in CY 2020. It also manufactures complex and specialised precision stamped components, welded assemblies, brass castings and cages & bronze castings and bushings.

The Ahmedabad-based company offers diversified suite of precision engineering products across geographies and end-user industries, which comprises of engineering business, under which it manufactures bearing cages (in brass, steel and polyamide materials), complex and specialised precision stamped components, welded assemblies and brass castings and cages & bronze bushings; and solar EPC business, under which it provides complete comprehensive turnkey solutions to all solar photovoltaic requirements.

As of September 30, 2021, has manufactured more than 7,205 bearing cages and more than 295 other products. In addition, over the past three years its product development and innovation centre has developed more than 1,200 products in different bearing types.

The company has five strategically located manufacturing facilities with two of its principal manufacturing facilities at Changodar and one at Moraiya, near Ahmedabad in Gujarat in India, and one manufacturing unit each at Changshu, China and Ghimbav Brasov in Romania, which helps it to penetrate global markets more efficiently and in a cost effective manner and allow access to its customers in over 25 countries covering five continents i.e., North America, Europe, Asia, South America and Africa.

Harsha Engineers made a profit of Rs 45.44 crore on revenue of Rs 873.75 crore for FY21, with two-thirds of the income coming from outside India for last three fiscals. For the six months ending September 30, 2021 it clocked a profit of Rs 43.71 crore on revenue of Rs 629.46 crore, i.e. 64.6% of its revenue.

The Indian bearings market grew at a CAGR of 7.2% from 2015 to 2019, due to the impact of global outbreak of COVID-19 and subsequent imposition of restrictions led to fall in demand for bearings. However, going forward, with resumption of economic activities, the market is expected to grow at a CAGR of 7.9% during 2021 to 2029 and is estimated to be valued at USD 9 billion in 2029.

Axis Capital Limited, Equirus Capital Private Limited and JM Financial Limited are the book running lead managers to the issue.

Source : Equity Bulls

Keywords

HarshaEngineersInternational DRHP SEBI IPO FundRaising