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Shares Rise 36% on Debut; Should You Buy, Sell or Hold?

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Harsha Engineers Shares List on NSE, BSE: Harsha Engineers made its D-street debut today. Shares of the company began trading on the NSE at Rs 450 per share, up 36 per cent from the IPO price of Rs 314-330 apiece per share and on the BSE the stock debuted at Rs 444 apiece, rising 35 per cent.

The Rs 755-crore public issue was bought 74.7 times by participants. Its qualified institutional buyer portion was subscribed 178.26 times, while the portion reserved for non-institutional investors saw a subscription of 71.32 times. The retail investors’ portion was subscribed 17.63 times. The Harsha Engineers International IPO comprised a fresh issue of Rs 455 crore and an offer for sale (OFS) of up to Rs 300 crore by shareholders and promoters.

The lot size of Harsha Engineers IPO was 45 shares. It means an investor needed to spend a minimum of Rs 14,850. A retail individual investor could submit bids for up to 13 lots or 585 shares by spending Rs 1,93,050. Harsha Engineers IPO’s price band was fixed at Rs 314-330 per share band.

Axis Capital Limited, Equirus Capital Private Limited and JM Financial Consultants were the lead managers of the IPO.

Harsha Engineers is the largest manufacturer of precision bearing cages, in terms of revenue, in organised sector in India, and among the leading manufacturers of precision bearing cages in the world. The company offers diversified suite of precision engineering products across geographies and end-user industries. The company supplies its products to customers in over 25 countries covering five continents including North America, Europe, Asia, South America and Africa.

Motilal Oswal Financial Services in its report noted that Harsha Engineers with its dominant position is well placed to capture the growing bearing cage demand across industries. “We like its increasing focus on other specialized precision components and on the growing EV segment which could boost its EBITDA margins,” analysts at Motilal Oswal Financial Services. Harsha Engineers International Ltd is the largest manufacturer of precision bearing cages, with 50-60 per cent market share in the organized market. It offers a diversified suite of precision engineering products across geographies and end-user industries. It operates under 2 business divisions – engineering business and solar EPC business.

What Should Investors Do Now?

Analysts seem to be optimistic on Harsha Engineers with its dominant position and well placed to tap the growth in specialized precision components and bearing cage demand across all the industries.

Santosh Meena, Head of Research, Swastika Investmart Ltd., said: “Harsha Engineers Ltd. has debuted at Rs. 450 i.e. 36 per cent above its issue price.  The company’s good listing can be attributed to outstanding prospects and a phenomenal response from the investors. The company’s strong fundaments, competitive advantages like high entry barriers and switching costs, experienced management team, strategically located manufacturing facilities and robust growth outlook makes this stock a strong candidate for long-term investing. Further, the company is a proxy play on India becoming the global manufacturing hub. Those who applied for listing gains can maintain a stop loss of Rs. 400. Our recommendation for the investors is to hold the allotted shares and long-term investors can accumulate the stock on dips.”

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