Azad Engineering extends rally as Abu Dhabi Investment Authority buys 4 lakh shares

Shares of Azad Engineering extended gains on the second day of listing, advancing 5.5 percent to Rs 714 on December 29 after sovereign wealth fund Abu Dhabi Investment Authority picked up 3.98 lakh equity shares for Rs 28.65 crore at an average price of Rs 719.9 each.

The investment authority is acquiring shares at a 37 premium over the issue price of Rs 524. On its debut on December 28, the Sachin Tendulkar-backed machined components maker was listed at a 29 percent premium at Rs 677.5.

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“Azad Engineering’s successful listing signifies its strong fundamentals and growth potential. For investors seeking exposure to the manufacturing sector with high growth potential, the company offers a compelling opportunity, and existing investors in the IPO may consider holding their shares,” Shivani Nyati, head of wealth at Swastika Investmart, said.

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The company will spend Rs 60.4 crore from the fresh issue proceeds on buying plant and machinery, and repay debts amounting to Rs 138.19 crore. Its borrowings stood at Rs 154.2 crore as of September 2023. The remaining amount will be used for general corporate purposes.

The Rs 740-crore issue had a combination of fresh shares of Rs 240 crore by the company and an offer-for-sale of shares worth Rs 500 crore by existing shareholders.

“In the long run, we see a lot of growth opportunities come through the expansion plan and gaining market share globally from 1 percent to multifold due to larger wallet share contributions from long-standing clients like Mitsubishi Heavy, General Electric, Honeywell International, and Siemens Energy,” Prashanth Tapse, a research analyst at Mehta Equities said.

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