Azad Engineering's upward trajectory continued as the Abu Dhabi Investment Authority acquired 4 lakh shares, marking a significant development in the company's post-listing journey. The sovereign wealth fund secured these shares at a substantial 37 per cent premium over the issue price of Rs 524, reflecting strong investor confidence. On its debut, the Sachin Tendulkar-backed machined components maker had already listed at a noteworthy 29 per cent premium at Rs 677.5.
The second day of listing saw Azad Engineering's shares advancing by 5.5 per cent to Rs 714 on December 29, driven by the strategic investment from the Abu Dhabi Investment Authority. The sovereign wealth fund's acquisition of 3.98 lakh equity shares amounted to Rs 28.65 crore, with an average price of Rs 719.9 per share.
The success of Azad Engineering's listing underscores its robust fundamentals and growth potential, making it an attractive option for investors seeking exposure to the manufacturing sector. Shivani Nyati, Head of Wealth at Swastika Investment, emphasized the compelling opportunity the company presents, suggesting existing IPO investors may find value in holding their shares.
Allocating the fresh issue proceeds, Azad Engineering plans to utilize Rs 60.4 crore for acquiring plant and machinery and repaying debts amounting to Rs 138.19 crore. As of September 2023, the company's borrowings stood at Rs 154.2 crore. The remaining funds will be directed towards general corporate purposes.
The Rs 740-crore issue comprised Rs 240 crore in fresh shares by the company and a Rs 500 crore offer-for-sale by existing shareholders. Prashanth Tapse, a research analyst at Mehta Equities, highlighted the growth prospects for Azad Engineering, foreseeing expansion opportunities and an increase in market share globally. Tapse pointed to the potential for substantial growth, driven by contributions from longstanding clients such as Mitsubishi Heavy, General Electric, Honeywell International, and Siemens Energy. The strategic investment from the Abu Dhabi Investment Authority and Azad Engineering's sound financial planning position the company for continued success in the evolving market landscape.
