Shares of Harsha Engineers International (HEIL) made a strong debut on Indian bourses, ending the listing day 47 percent higher than their issue price on Monday. The stock slipped to the low of Rs 430 and marked the high of Rs 527.65.
The stock opened at Rs 450 on NSE, 36.36% higher than the issue price of Rs 330 per share. It closed at Rs 486.50, up Rs 156.5.
The opening tick on BSE was Rs 444, 34.55 percent higher than the issue price.
The traded volumes in the opening trade were 24.56 lakh shares on the NSE and 1.69 lakh shares on the BSE.
At the last close, the company had a valuation of Rs 4,424 crore.
“The company’s good listing can be attributed to the outstanding prospects and a phenomenal response from investors,” said Santosh Meena, Head of Research, Swastika Investmart, quoted by Moneycontrol.
The company’s strong fundamentals, competitive advantages like high entry barriers and switching costs, experienced management team, strategically located manufacturing facilities and robust growth outlook make this stock a strong candidate for long-term investing, he added.
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The company’s maiden offering saw 75X subscribers to the shares offered; becoming the most oversubscribed IPO subscriptions this year.
HEIL is the largest manufacturer of precision bearing cages, welded assemblies, and brass castings in India. It has over 50 percent share in the organized market in India, with a global foothold of 6.5 percent for brass, steel, and polyamide cages.
The company raised Rs 455 crore via issuance of fresh shares and a secondary share sale of Rs 300 crore. HEIL now trades 48 times its earnings per share of Rs 10.1 on a post-diluted basis.
The company planned to use the proceeds from the share sale in repayment of debts, capital expenditure towards the purchase of machinery, and existing production facilities.
“Considering HEIL’s dominant market share (50-60 percent in Indian bearing market), a healthy return on equity and return on capital employed of 17.6 percent and 27 percent, respectively, and strong clientele with long-standing relationships. We recommend ‘subscribe’ rating to this IPO,” Anand Rathi had said in an IPO note earlier this month.