Azad Engineering Limited

About  Azad Engineering Limited

Incorporated in 1983, Azad Engineering Limited manufactures complex and highly engineered precision forged and machined components used in the energy, aerospace and defence, and oil and gas industries. 

Its product portfolio includes 3D rotating airfoil/ blade portions of turbine engines and other critical components for gas, nuclear and thermal turbines used in industrial applications and energy generation. These components are also used in defence and civil aircrafts and spaceships. 

These products are used by original equipment manufacturers (OEMs) to make final products. Some of its customers include global OEMs such as General Electric, Honeywell International Inc., Mitsubishi Heavy Industries, Siemens Energy, Eaton Aerospace and MAN Energy Solutions SE. It also supplies its components to countries such as the USA, China, Europe, the Middle East, and Japan and competes with manufacturers from China, Europe, USA and Japan. 

It carried out sales in 15 countries between 31 March 2021 and 30 September 2023 and derives most of its revenue from exports to global OEMs, accounting for 89% of its total revenue from contracts as of 30 September 2023. It has manufactured and delivered 3 million units between FY09 and FY23.  

It operates four advanced manufacturing facilities in Hyderabad, Telangana, with a total manufacturing area of approximately 20,000 square metres. Further, it has proposed two new manufacturing facilities in Telangana, one of them as an exclusive manufacturing facility for Mitsubishi Heavy Industries. These new facilities will be funded through internal accruals. 

Between FY21 and FY23, it saw a CAGR rise of 27% in its revenue from operations. Meanwhile, the company's profitability has remained volatile, with a net profit of ₹29.4 crore in FY22 to ₹8.4 crore in FY23. 

The overall global energy turbine components market is expected to reach ₹282 billion by FY27, the market for aerospace and defence components is expected to rise at a CAGR of 9%. Meanwhile, the market for drill bits could rise at a CAGR of 4%, while the overall market for downhole drilling tools by 4% by FY27 which could benefit the company. 

And now, Azad Engineering Limited is coming out with its initial public offer (IPO). The IPO will be an offer for sale as well as a fresh issue. The money raised through the fresh issue will be utilised to repay borrowings, fund capital expenditure and for general corporate purposes. Its shares will be listed on the NSE and the BSE.

     Here are key details about the Azad Engineering Limited IPO:

Financial snapshot

Here’s a quick look at Azad Engineering Limited IPO’s strengths, weakness, opportunities and risks (SWOT analysis)

Strengths and opportunities

1. Operates in an industry with a significant barrier to entry due to a lengthy qualification process and criticality of components.  
2. Supplies to OEMs with high global market penetration, such as in FY23, it supplied to customers that control approximately 70% of the global gas turbine market.
3. Long standing customer relationships with globally preferred partners such as General Electric and Mitsubishi Heavy Industries, with whom it has an average relationship of over 10 years.
4. The company has a well-diversified customer base spread across countries such as the USA, Europe, Japan, Middle East, United Kingdom and China outside India.
5. Advanced manufacturing facilities with a combined annual installed capacity of 642,310 hours per annum and a capacity utilisation of 90% per annum as of 30 September 2023. 
6. Employs a skilled workforce of 1,300 personnel as of 30 September 2023.  
7. Consistent track record of financial performance with EBITDA margins of 22%, 32% and 28% in FY21, FY22 and FY23 respectively.

Risks and threats

1. A significant portion of its revenue is derived from its top five customers, accounting for 59%, 54% and 63% of its total revenue from operations in FY21, FY22 and FY23 respectively.
2. Exposed to risks related to the global nature of its operations, such as legal and regulatory requirements of different jurisdictions and forex rates. 
3. Held a total outstanding borrowing of ₹154 crore as of 30 September 2023. 
4. Subject to strict compliance with quality requirements. 
5. Subject to the risk of delay or default in payments, the total trade receivables stood at ₹118 crore as of FY23. 
6. Had negative cash flows from operating activities in FY23 and from investing activities in the last three fiscal years.

Azad Engineering Limited IPO details

|Azad Engineering Limited IPO date

According to the offer document filed by the company with the SEBI, the Azad Engineering IPO’s opening date – in other words, the Azad Engineering IPO launch date – will be 20th December 2023. The Azad Engineering IPO closing date is 22nd December 2023. After this, investors will be updated about the allotment status on 26th December 2023.

Investors, who have been allotted shares, can expect them to be credited to their demat account on 27th December 2023. The Azad Engineering IPO listing date is 28th December 2023. The listing date is the date on which the shares of a company get listed on the bourses – NSE and BSE. 

|Azad Engineering Limited IPO Price Band

The IPO is an offer for sale as well as a fresh issue. The Azad Engineering IPO price band has been set between ₹499 and ₹524 per share. Interested investors can choose a price within this band to apply for the IPO. 

The Azad Engineering IPO listing price will be determined on 28th December 2023. The listing price is the price at which a company’s shares debut on the stock exchanges.

|Azad Engineering Limited IPO Lot size

The Azad Engineering IPO details have been declared. The Azad Engineering IPO lot size is set at 28 shares and an investor can apply for a minimum of 1 lot. Meanwhile, the Azad Engineering IPO issue size is approx ₹740 crore.

How to pre-apply for the Azad Engineering Limited IPO?

You can pre-apply for the Azad Engineering Limited IPO on Upstox. The pre-application for this IPO, which means pre-apply open date, usually begins a day before the IPO opens for subscription. 

Follow these steps to pre-apply for the IPO: 

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Azad Engineering Limited IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Pre-Apply’
7. Accept the mandate on your UPI app

How to apply for the Azad Engineering Limited IPO?

If you are interested in this investment opportunity but unsure how to apply for the Azad Engineering Limited IPO, here we are listing out the steps for you. 

When the public issue opens for subscription, one can follow this step-by-step guide on how to apply for the Azad Engineering Limited IPO on Upstox: 

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Azad Engineering Limited IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Apply’
7. Accept the mandate on your UPI app

How to check the Azad Engineering LimitedIPO allotment status?

When the allotment process is completed, you can check the status of your application on the Upstox app. Share allotment is generally done around five to six days after an IPO closes. 

Here’s a step-by-step guide on how to check the Azad Engineering Limited IPO allotment status:

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover page, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, you will find the ‘View all’ option
5. Once you click on ‘View all’, you will be directed to the ‘IPO’ tab
6. In the ‘IPO’ tab, click on ‘My applications’ 
7. In ‘My applications’, under the History section, your Azad Engineering Limited IPO allotment status will be mentioned

Check Allotment Status

Open a demat account with Upstox to apply for the Azad Engineering Limited IPO

To apply for the Azad Engineering Limited IPO, you need to mandatorily have a demat account. A demat account helps you hold the shares you buy in a dematerialised format. If you don’t have a demat account yet, you can open one with Upstox by visiting our website or by downloading the app.

Here is a step-by-step guide on how to open a demat account with Upstox:

1. Click here to visit the demat account opening page on the Upstox website. 
2. Enter your phone number and other essential details to begin opening a demat account.
3. Upload the scanned copies of your PAN, Aadhaar card, a cancelled cheque, and your bank statement as needed. 
4. Complete the e-verification using the OTP sent to your registered mobile number. 

This is all it takes to open a demat account with Upstox. Easy and quick, right? 

Open Demat Account

Upstox – trading app to apply for the Azad Engineering Limited IPO

Applying for IPOs with Upstox is extremely easy. The user-friendly interface and top-notch security make Upstox one of the leading trading apps in India.

You can apply for the Azad Engineering Limited IPO on Upstox, provided you have a demat account. As mentioned in the previous section, you can simply follow the steps to open a demat account with Upstox. The biggest advantage is that when you apply for an IPO using your Upstox account, the brokerage charges are zero.

In fact, courtesy of its robust features and minimal charges, Upstox is among the most preferred trading apps. Lakhs of Indians trust Upstox as it is a reliable trading platform that makes IPO applications easy.