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AZAD ENGINEERING LTD IPO

IPO Details

-
-
28 Shares
₹ 14,672
₹ 499– 524
₹ Up to 740 Cr

Issue timeline

  • -
  • 26-Dec-2023
  • 27-Dec-2023
  • 27-Dec-2023
  • 28-Dec-2023

Subscription Status

Shareholder -
Qualified Institutional Buyers -
Non-Institutional Investor -
Retail Individual Investor -
Employee -
Total -

About Company

- They manufacture complex and highly engineered precision forged and machined components that are mission and life-critical and one of the key manufacturers of their qualified product lines supplying to global original equipment manufacturers
(“OEMs”) (Source : EY Report, Company RHP)
- Their diversified product ranges across energy, aerospace and defence, and oil and gas industries.As of September 30, 2023, they have approximately 45 qualified manufacturing processes and 1,400 qualified parts and components

Strengths & Risks

Strengths (3)

Engineered for success and a preferred name in the manufacturing of highly engineered, complex and mission and life critical high precision components
Despite competition from manufacturers in China, Europe, USA and Japan, they believe that they have differentiated their offerings, distinguished themselves and been successful in being the preferred partner to their customers. They believe they have a significant manufacturing cost advantage which results in superior margins while staying competitive.(Source: Company RHP)

Risks (2)

They have had negative cash flows in prior periods and may continue to have negative cash flows in the future
They have experienced the cash flows in the past, both positive and negative and Negative operating cash flows over extended periods, or significant negative cash flows in the short term, could materially impact their ability to operate the business and implement their growth plans. As a result, their cash flows, business, future financial performance and results of operations could be materially and adversely affected.(Source: Company RHP)

  • Engineered for success and a preferred name in the manufacturing of highly engineered, complex and mission and life critical high precision components
    Despite competition from manufacturers in China, Europe, USA and Japan, they believe that they have differentiated their offerings, distinguished themselves and been successful in being the preferred partner to their customers. They believe they have a significant manufacturing cost advantage which results in superior margins while staying competitive.(Source: Company RHP)

  • Supplying to OEMs with high global market penetration
    Based on their deep market knowledge and continuing interactions with their long-standing customers, which gives them expansive insight into multiple industries, they believe that they serve as a critical source supplier for global OEMs.In Financial Year 2023, they have supplied to customers which control approximately 70% of the gas turbine market globally. They supply components to five of the key manufacturers in the turbine manufacturing industry (Source: EY Report & Company RHP)

  • Long-standing and deep customer relationships
    Their company has existing relationships with both Indian and global OEMs. Their long-standing customer base comprises leading product OEM companies, key strategic and globally preferred partners such as General Electric and Mitsubishi Heavy Industries, Ltd., with whom they have an average relationship of over 10 years. (Source: Company RHP)

  • They have had negative cash flows in prior periods and may continue to have negative cash flows in the future
    They have experienced the cash flows in the past, both positive and negative and Negative operating cash flows over extended periods, or significant negative cash flows in the short term, could materially impact their ability to operate the business and implement their growth plans. As a result, their cash flows, business, future financial performance and results of operations could be materially and adversely affected.(Source: Company RHP)

  • They are dependent on third parties for the transportation and timely delivery of products to customers
    They rely on third parties for the transportation services for the timely delivery of products to their customers located in India and other countries. Their domestic operations use a number of different modes of transportation, including road, air and rail. In the event that these logistic service providers are unable to continue to provide these necessary services for their operations then their business, results of operations, financial condition, cash flows, future prospects and reputation may be materially adversely affected.(Source: Technopak report, Company DRHP)

Financials

Total Income
Profit after Tax
Basic Earning per Share (EPS)

Industry Overview

- Overview of global energy consumption : There has been a steady increase in energy consumption, which is rebounding from setback due to COVID-19 pandemic. Over the last 5 years, the global energy consumption has witnessed a steady upward trend with annualized growth rate of ~1.8% from 2017-2022, driven by macroeconomic factors such as increase in income levels, urbanization, and industrialization.

 

- Key global trends in gas power : Natural Gas as a bridging fuel -Natural gas is referred as a transitional or bridging fuel to reduce carbon-di-oxide emissions ; Realignment of Supply Contracts- The supply chain disruptions made European Union enter discussions with Qatar for long term supply contracts, with Germany entering a 15-year long contract with QE (Qatar Energy) to supply LNG, 2 Mn Tons of LNG annually starting from 2026

 

vishal-mega-mart IPO

Azad Engineering Ltd IPO

₹ 14,672
28 Shares

Subscription Status

Shareholder -
Qualified Institutional Buyers -
Non-Institutional Investor -
Retail Individual Investor -
Employee -
Total -

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*The financials mentioned above are sourced from DRHP/ RHP documents.

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