As of 12.45 pm, the offer received applications for 2,53,51,536 shares, which is 23.31 times the total issue size of 56,85,556 shares.
The company and shareholders plan to raise Rs 731 crore from primary markets. The offer comprises fresh issue of Rs 56 crore and offer for sale of 75 lakh shares. Investors can bid in a multiple of 16 shares and multiples thereof. The issue is priced in the range of Rs 880-900.
Considering the FY21 adjusted EPS of Rs 31.93 on post-issue basis, the company is going to list at a PE of 28.19 with a market cap of Rs 2,451 crore, while its peers namely and MM Forgings are trading at a PE of 123.30 and 37.14, respectively.
Most analysts suggest subscribing to the issue. However, some say a degree of caution is needed.
“It is demanding EV/sales of 4.3x, which is at premium to the peer average of 3.9x. The overall outlook for bearing rings and auto components industries remains positive. However, despite its presence in the lucrative industrials segment, the higher demanded valuation is a concern for investors. Thus, we assign a “subscribe with caution” rating for the issue,” said Choice Broking.
From the share sale, the company will only get Rs 56 crore, which will be used for funding long-term working capital requirements and general corporate purposes, the company said.
The company manufactures hot rolled forged and machine bearing rings and automotive components that are used across vehicle segments and other segments namely industrial machinery, wind turbines and railways.
Currently, the company has three manufacturing units in Rajkot with an annual achievable capacity of 144,750 MTPA in forging and 69 million parts per annum in machining. It counts SKF India,
and among its customers.
