DRHP Link: https://www.icicisecurities.com/Upload/ArticleAttachments/Azad%20Engineering%20Limited%20-%20DRHP.pdf
Bhubaneswar: Azad Engineering Limited has filed its Draft Red Herring Prospectus (“DRHP”) with market regulator Securities and Exchange Board of India (“SEBI”).
The Company’s initial public offering comprises a fresh issue of up to ₹2400 million and an offer for sale of equity shares of face value of ₹2 each aggregating up to ₹5000 million.
The offer for sale comprises of Equity Shares aggregating up to ₹1700 million by Rakesh Chopdar, Equity Shares aggregating up to ₹2,800 million by Piramal Structured Credit Opportunities Fund and Equity Shares aggregating up to ₹500 million by DMI Finance Private Limited.
The company proposes to utilize the Net Proceeds from the offer towards Funding capital expenditure of the company, repayment/pre-payment, in full or part, of certain borrowings availed by the Company, and general corporate purposes.
Axis Capital Limited, ICICI Securities Limited, SBI Capital Markets Limited and Anand Rathi Advisors Limited are the Book Running Lead Managers to the issue.
Azad Engineering is one of the key manufacturers of their qualified product lines supplying to global original equipment manufacturers (“OEMs”) in the aerospace and defence, energy, and oil and gas industries, manufacturing highly engineered, complex and mission and life-critical components. The company manufacture complex and highly engineered precision forged and machined components that are mission and life-critical and hence, some of their products have a “zero parts per million” defects requirement.
Azad Engineering compete with manufacturers from China, Europe, USA and Japan. Their customers include global OEMs across the aerospace and defence, energy, and oil and gas industries such as General Electric, Honeywell International Inc., Mitsubishi Heavy Industries, Ltd., Siemens Energy, Eaton Aerospace and MAN Energy Solutions SE.
Azad Engineering’s components have been supplied to countries such as USA, China, Europe, Middle East, and Japan since their inception. Accordingly, they are a key link in the global supply chain for OEMs. The company have increased their revenue from ₹1,240.00 million in Financial Year 2020 to ₹2,516.75 million in Financial Year 2023 (CAGR of 27% between Financial Years 2020 and 2023) with an adjusted EBITDA margin of 31.61% in Financial Year 2023. Azad Engineering is one of the fastest growing manufacturers (in terms of revenue growth for the period between Financial Years 2020 – 2023) with one of the highest EBITDA margins among the key players for machined components for the key industries serviced by them.
