Azad Engineering’s stellar debut at the stock market has bumped up Sachin Tendulkar’s investment in the firm sixfold.
What Happened: The renowned cricket icon holds approximately 4.3 lakh shares in the company, acquired at an adjusted average cost of ₹114.10 each in March, which would amount to a total investment of around ₹4.9 crore, ignoring stock splits and bonus shares.
The stock made its debut on the stock exchanges on December 28 at ₹720, pegging the cricket legend’s total investment at about ₹30.96 crore.
Other Winners: Meanwhile, the investments of Saina Nehwal, PV Sindhu and VVS Laxman in the firm have tripled. As per the prospectus, their adjusted acquisition price was ₹228.17, with each of them holding 44,000 shares, amounting to a total investment of around ₹1 crore each.
Notably, none of the sports stars participated as selling shareholders in the IPO. Their share acquisitions occurred earlier in 2023, following which the company underwent a stock split and issued bonus shares.
The Business: Azad Engineering Limited, established in 1983, specializes in manufacturing aerospace components and turbines. The company supplies its products to original equipment manufacturers (OEMs) across the aerospace, defense, energy, and oil and gas industries.
With four manufacturing facilities in Hyderabad, Azad Engineering boasts a prestigious clientele that includes General Electric, Honeywell International, Mitsubishi Heavy Industries, Siemens Energy, Eaton Aerospace and MAN Energy Solutions.
Many analysts express optimism regarding the company’s long-term contracts, a stable customer base, and robust revenue visibility. Motilal Oswal Financial Services stated, “We like AEL given its presence in the high-growth niche segment with high entry barriers, diversified product/client portfolio, and robust financials.”
Azad Engineering’s IPO witnessed significant demand, with a subscription rate of 80.6 times. Qualified institutional buyers led the way, subscribing to 179.66 times the allotted quota. High-net-worth individuals (non-institutional investors) and retail investors followed suit, subscribing to shares at rates of 87.55 times and 23.71 times their respective portions.
Comparing Azad Engineering with similar players in the capital goods sector, analysts have observed the company’s superior growth, comparable return ratios, and a valuation in line with its peer group.
Of the proceeds from the fresh issue, Azad Engineering plans to allocate ₹60.4 crore for acquiring plant and machinery and repay debts amounting to ₹138.19 crore, with borrowings standing at ₹154.2 crore as of September 2023. The remaining funds will be utilized for general corporate purposes.
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