Azad Engineering made a solid debut on Dalal Street, with its shares listing at a premium of slightly over 37 per cent over its issue price of Rs 524.
Shares of the company opened on the National Stock Exchange at Rs 719.70, marking a 37.24 per cent premium over the issue price. On the Bombay Stock Exchange, the stock debuted at Rs 716.75.
The strong listing is in line with what the grey market premium had indicated, albeit a substantial dip from the allotment day. On the listing day, the Azad Engineering shares were trading on the grey market at a premium of approximately Rs 200.
Commenting on the market listing, Shivani Nyati, Head of Wealth, Swastika Investmart Ltd, said, “Azad Engineering, the manufacturer of forged components, made a solid debut on the stock market, listing at Rs 720 per share, a substantial 37 per cent premium over its IPO price of Rs 524. While this performance demonstrates strong investor interest, it falls short of the pre-listing excitement that anticipated a potentially higher rise.”
“Azad Engineering’s successful listing signifies its strong fundamentals and growth potential. For investors seeking exposure to the manufacturing sector with high growth potential, Azad Engineering offers a compelling opportunity, and existing investors in the IPO may consider holding their shares. However, a cautious approach is advised due to the full valuation and potential risks, and thus a stop loss of around 650 is recommended,” Nyati noted.
Azad Engineering IPO, with shares priced at Rs 499-524 and a lot size of 28 equity shares, saw a successful fundraising of around Rs 740 crore.
The oversubscribed IPO, at 83.04 times, attracted significant investor interest, especially from qualified institutional bidders (QIBs) with a subscription of 179.66 times.
Non-institutional investors subscribed 87.61 times, and retail and employee segments saw substantial interest at 23.79 times and 14.71 times, respectively.
Established in 1983, Azad Engineering specializes in manufacturing aerospace components and turbines, serving OEMs in aerospace, defence, energy, and oil and gas.
Brokerages recommended subscribing to the issue, highlighting the company’s strong fundamentals, competitive valuations, and experienced management.
Axis Capital, ICICI Securities, SBI Capital Markets, and Anand Rathi Shares and Stock Brokers are the lead managers, with Kfin Technologies as the registrar.