Hyderabad-based complex and highly engineered precision forged and machined components maker Azad Engineering has filed Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India for a ₹740-crore initial public offering.
The IPO comprises a fresh issue of up to ₹240 crore and an offer for sale of equity shares of face value of ₹2 each aggregating up to ₹500 crore. The OFS consists of equity shares aggregating up to ₹170 crore by promoter Rakesh Chopdar; by investors Piramal Structured Credit Opportunities Fund (up to ₹280 crore) and DMI Finance (₹50 crore).
In the draft document, the company said it proposes to utilise the net proceeds from the offer towards funding capital expenditure, repayment/pre-payment, in full or part, of certain borrowings availed and general corporate purposes.
Azad Engineering is focused on supplying to global OEMs in the aerospace and defence, energy and oil and gas industries. Most of its revenues are from exports to global OEMs, backed by long-term contracts and as of June 30, 90.68% of total revenue was from contracts with customers located outside India. For FY-2023, exports and domestic sales amounted to ₹202 crore and ₹49 crore respectively. Its total income has grown at a CAGR of 44.63% from ₹125 crore in FY-2021 to ₹261 crore in FY-2023, the company said in DRHP.
The company, whose manufacturing infrastructure comprises four facilities, counts several leading sports personalities among its investors, including the legendary Sachin Tendulkar.