Azad Engineering IPO Analysis: Subscription Status, GMP, and Should You Consider Investing?

In the ever-evolving landscape of investment opportunities, Azad Engineering Ltd (AEL) stands out with its ongoing Initial Public Offering (IPO), scheduled to close today, December 22. As investors contemplate whether to dive into this opportunity, let’s delve into the key aspects shaping the narrative around Azad Engineering IPO.

Subscription Status and Market Response: As of 10:52 am on the final day of bidding, the Rs 740-crore IPO has garnered significant attention, receiving bids for 13,75,30,204 shares against the 98,32,042 shares on offer. The non-institutional investors’ category witnessed a subscription of 30.29 times, while retail individual investors (RIIs) subscribed 13.98 times. Qualified institutional buyers (QIBs) subscribed 1.56 times, reflecting diverse investor interest.

Grey Market Premium (GMP) Overview: Market observers note a Rs 370 GMP for Azad Engineering, indicating a 70.61% expected listing gain from the issue price. The ‘grey market premium’ serves as a barometer of investor sentiment, signaling a readiness to pay beyond the issue price.

Expert Recommendations: Reliance Securities and Canara Bank Securities both recommend a ‘Subscribe’ rating for the Azad Engineering IPO. Reliance Securities emphasizes AEL’s rapid growth, high EBITDA margins, and a unique business model as factors supporting a long-term investment approach. Canara Bank Securities highlights the company’s strong track record, robust business plan, and management expertise, suggesting a potential for listing gains.

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IPO Details and Financial Snapshot: The IPO, open for subscription since December 23, boasts a price band of Rs 499-524 per share, with a minimum lot size of 28 shares. The company aims to raise Rs 740 crore, valuing it close to Rs 3,000 crore. The IPO comprises a Rs 500 crore Offer For Sale (OFS) component and Rs 240 crore through a fresh issue of shares. The proceeds will fund capital expenditure and debt repayment.

Conclusion: As the Azad Engineering IPO concludes, the market eagerly awaits the allotment on December 26, with listing scheduled for December 28 on both BSE and NSE. Investors should weigh the strong subscription response, GMP, and expert opinions to make informed decisions about participating in this promising investment opportunity.

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