Azad Engineering Limited IPO

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  1. Product Lines and Industries Served:
    • The company is a key manufacturer of precision-forged and machined components serving global Original Equipment Manufacturers (OEMs) in the energy, aerospace and defense, and oil and gas industries.
  2. Revenue and Growth:
    • As of September 30, 2023, the company generated a revenue of ₹1,142.92 million, with airfoils/blades for the energy industry contributing 72.00% to the revenue.
    • The company experienced significant growth, increasing revenue from ₹1,240.00 million in Financial Year 2020 to ₹2,516.75 million in Financial Year 2023, with a Compound Annual Growth Rate (CAGR) of 27%.
  3. Customer Base:
    • The company’s customers include global OEMs across various industries, such as General Electric, Honeywell International Inc., Mitsubishi Heavy Industries, Ltd., Siemens Energy, Eaton Aerospace, and MAN Energy Solutions SE.
  4. Global Supply Chain:
    • The company supplies components to countries like the USA, China, Europe, the Middle East, and Japan, playing a key role in the global supply chain for OEMs.
  5. Product Portfolio:
    • The company manufactures 3D rotating airfoil/blade portions of turbine engines and critical components for gas, nuclear, and thermal turbines used in industrial applications or energy generation, as well as defense and civil aircraft and spacecraft.
  6. Industry Demand and Components:
    • The demand for precision-forged and machined components is driven by requirements in energy turbines, aircraft (commercial and military), and other critical applications.
    • The company’s components include airfoils/blades and various critical components for missiles and drilling rigs in the oil and gas industry.
  7. Qualification and Barrier to Entry:
    • The company emphasizes its substantial experience as a tier 1 supplier with a qualification process characterized by significant entry barriers.
    • The qualification process involves a lengthy and stringent evaluation of technical capabilities, vendor registration, product qualifications, and quality control procedures.
  8. Market Dynamics and Growth:
    • The company addresses markets with a high growth potential, such as the global energy turbine components market, the aerospace and defense components market, and the oilfield drilling components market.
  9. Manufacturing Facilities and Expansion Plans:
    • The company currently operates four advanced manufacturing facilities in Hyderabad, Telangana, with additional facilities in the pipeline.
    • Upcoming facilities are planned for Tuniki Bollaram village and Mangampet village in Telangana to be funded from internal accruals.
  10. Management and Board:
    • The company boasts a diversified board and a professional management team with relevant experience in the engineering and manufacturing industries.
    • Promoter Rakesh Chopdar has been associated with the company as a director since 2003.
  11. Product Categories and Qualification:
    • The company offers approximately 45 qualified manufacturing processes and 1,400 qualified parts and components, positioning itself as a strategic partner to OEMs.

Objects of the Azad Engineering Limited IPO:

The Net Proceeds of the Fresh Issue are proposed to be utilized in the following manner: i. Funding capital expenditure of the Company; ii. Repayment/prepayment, in part or full, of certain of the borrowings availed by the Company; and iii. General corporate purposes.
DRHP of Azad Engineering Limited IPO
RHP of Azad Engineering Limited IPO

Azad Engineering Limited IPO Details:

Open Date: Dec 20 2023
Close Date: Dec 22 2023
Total Shares: 14,122,138
Face Value: ₹ 2 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 740 Cr.
Lot Size: 28 Shares
Issue Price: ₹ 499 - 524 Per Equity Share
Listing At: NSE,BSE
Listing Date: Dec 28 2023

Promoters And Management:

Rakesh Chopdar is the Chairman and CEO of the Company. He has completed his education until the 10th standard from Trinity Public School, Hyderabad, Telangana. He has been involved with the Company since 2003 and has more than two decades of experience in engineering and manufacturing activities. He has won the third prize at the “National Award for Outstanding Entrepreneurship” under “Small Enterprises (Manufacturing)” from the Government of India, MSME in 2012, “Young Asian Entrepreneur 2019-20” by CNBC – TV18 in 2020 and the National MSME Award-2022 first prize in manufacturing export medium enterprise by the Government of India, Ministry of Micro, Small and Medium Enterprises. Jyoti Chopdar is the Whole-Time Director of the Company. She has passed the examination for bachelor’s degree in arts from the Kurukshetra University. She has been associated with the Company for over eight years and is actively involved in the Company’s general administrative activities. Vishnu Pramodkumar Malpani is the Whole-Time Director of the Company. He holds a bachelor’s degree in technology from the Indian Institute of Technology, Guwahati, Assam. He has also completed the executive education programme on finance for non-finance managers from the Indian School of Business. He has previously worked with Wipro Technologies (a division of Wipro Limited) as project engineer, Prashaste Education and Management Consultancy Private Limited as lead consultant, Jubilant MotorWorks Private Limited as senior manager – business analytics, Raam Autobahn India Private Limited (Mercedes Benz Silver Star) as chief executive officer, BVS Nature Fresh Products Private Limited as chief operating officer and Visaka Industries Limited as general manager (strategy and business re-engineering). He has been associated with the Company for over three years.

Financials of Azad Engineering Limited IPO:

Particulars ( In Crore )
2021
2022
2023
6M-FY24
Revenue from Operations 123 194 252 159
Other Income 2 5 10 11
Total Revenue 125 199 262 170
Cost of Materials Consumed 22 38 50 29
Changes in Inventories -8 -17 -19 -9
Employee benefits expenses 33 46 59 34
Other Expenses 48 65 90 53
EBITDA 31 67 82 63
Depreciation & Amortisation 9 13 17 10
Finance Cost 5 14 52 22
EBIT 22 54 66 54
OPM (%) 24.39% 33.67% 31.39% 37.34%
PBT 16 40 13 32
Tax 5 11 5 5
PAT 12 29 8 27
NPM (%) 9.20% 14.78% 3.24% 15.86%
No.of Shares 5.91 5.91 5.91 5.91
EPS 1.94 4.98 1.43 4.54

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Azad Engineering Limited 252 8 1.43 365.6 524 3,098
MTAR Technologies Limited 573 104 33.84 69.0 2,313 7,114
Paras Defence and Space Technologies Limited 214 36 9.21 80.7 738 2,878
Dynamatic Technologies Limited 1,316 43 67.48 48.7 4,479 3,028
Triveni Turbine Limited 1,248 193 6.06 55.2 404 12,850
* All the data is as per FY23.

Lead Manager of Azad Engineering Limited IPO:

  1. Anand Rathi Securities Limited
  2. Axis Capital Limited
  3. ICICI Securities Limited
  4. SBI Capital Markets Limited

Registrar of Azad Engineering Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

Azad Engineering Limited 90/C, 90/D, Phase-1, I.D.A. Jeedimetla, Hyderabad 500055 Phone: +91 40 2309 7007 Email: cs@azad.in Website: https://www.azad.in/

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