Harsha Engineers lists at 36% premium despite weak market trends

Shares of Harsha Engineers International made a strong debut on the domestic stock exchanges on Monday, despite weak trends in the broader markets. The shares of the engineering company listed at a premium of 34.5% at ₹444 on the Bombay Stock Exchange (BSE), against the upper price band of the issue price of ₹314-330 apiece. On the National Stock Exchange (NSE), the stock opened at ₹450, up 36.3% from the initial public offering (IPO) price.   

Post listing, the stock surged as much as 46.9% to hit a high of ₹484.7, while it touched a low of ₹431 on the BSE. AT 10:20 AM, the stock was quoting at ₹474.65, with 9.55 lakh shares changing hands over the counter. The market capitalisation (m-cap) of the smallcap stock stood at ₹4,333.70 crore at the time of reporting.

In contrast, the 30-share Sensex was trading 876 points lower at 57,223 levels, with all constituents, barring Nestle, HCL Tech, and Infosys, floating in negative terrain. The broader market witnessed sharp selling, with MidCap and SmallCap indices crashing by 3.35% and 3.75%, respectively.

“The equity shares of Harsha Engineers International Ltd (Scrip Code: 543600) are listed and admitted to dealings on the Exchange in the list of ''B'' Group Securities,” the company said in an exchange filing today.

The strong listing of Harsha Engineers was in line with market expectations as the stock was trading at a premium of ₹150 per share in the grey market today, indicating a listing gain of around 45%. The ₹755-crore IPO of the country’s largest manufacturer of precision bearing cages had received an overwhelming response from investors. The IPO, which consisted of a fresh issue of ₹455 crore and an offer for sale (OFS) of ₹300 crore by promoters, was subscribed 74.7 times. The IPO quota reserved for qualified institutional investors was booked 178% times, non-institutional buyers by 71%, and retail investors by 17.6%.

Established in December 2010, Harsha Engineers International (HEIL) is a part of the Harsha Group, which offers a diversified suite of products across geographies and end-use industries. It manufactures brass, steel and polyamide cages and stamped components with production facilities in Asia (India and China) and in Europe (Romania). During FY20-22, HEIL reported CAGR revenue, EBITDA, and PAT growth of 22.1%, 40.2% and 104.9%, respectively.

HEIL’s market share is estimated to be around 50-60% in the Indian bearing cages market making it the largest manufacturer of precision bearing cages in the organised sector in India. HEIL accounted for 6.5% market share in the global organised bearing brass, steel and polyamide cages market in CY21, as per the CARE Advisory Report.

Most of the brokerages had assigned a “SUBSCRIBE” rating to the IPO, citing the current economic scenario and demand in bearing space.