Harsha Engineers IPO makes strong debut; stock zooms 30% over issue price

Harsha Engineers International Limited (HEIL), one of India's largest precision bearing cages producing companies, debuted on the stock market on September 26, 2022, at a premium of 36%. Though the IPO price range was Rs 314-330, the stock was listed on the NSE and BSE at a price of Rs 450 and Rs 444 respectively. 

What is the reason for the strong listing? As per Santosh Meena, Head of Research at Swastika Investment, Harsha Engineers IPO did well because:

1. Harsha Engineers has outstanding prospects, strong fundamentals and a robust growth outlook.
2. It has competitive advantages like high entry barriers and switching costs.
3. Harsha has an experienced management team that manages strategically located manufacturing facilities. 
4. The shares have been reasonably priced for the IPO.

This attracted a phenomenal response from the investors which led to the 36% premium listing on the debut day. 

What do Harsha Engineers do? Harsha Engineers International Limited is the largest manufacturer of precision bearing cages in India and its exports make up nearly two-thirds of its revenue. The company supplies these bearing cages in over 25 countries, and operates under two segments:

• Engineering business: Harsha Engineers makes bearing cages (in brass, steel, and polyamide materials), complex and specialised precision stamped components, brass castings, etc. 
• Solar business: Harsha Engineers is in the business of solar engineering, procurement, and construction and provides comprehensive turnkey solutions to all solar photovoltaic requirements. 

A look at how the IPO process fared: The Rs 755-crore Harsha Engineers IPO was open for subscription between September 14 to 16, 2022 for a price range of Rs 314 to Rs 330.

Harsha Engineers received the highest IPO subscription of 2022 - it was subscribed about 74.7 times above the actual offer. (Compare this to DreamFolks IPO, which was subscribed 57 times and Campus Activewear, which was subscribed 52 times)

• The quota for retail investors (RIIs) was subscribed 17.63 times
• The quota for non-institutional investors (NII) was subscribed 71.32 times
• And the quota for qualified institutional buyers (QIBs) was subscribed 178.26 times.

What happened on the day of stock market listing?

On the NSE: Harsha's stocks began their journey at a price of Rs 450 a piece with a 36.36% premium against the IPO price range of Rs 314-330.

On the BSE: Harsha's stocks began trading at Rs 444 a piece, with a premium of 34.54% as against the IPO price of Rs 314- Rs 330.