Azad Engineering Limited

Azad Engineering Limited -IPO DETAILS 

Company Overview 

Azad Engineering is a prominent manufacturer and supplier specializing in critical components for Original Equipment Manufacturers within the energy, Aerospace, Defense, and Oil & Gas sectors. The company serves diverse OEMs across the USA, China, Europe, Japan, and the Middle East. Noteworthy clients include General Electric, Honeywell International, Mitsubishi Heavy Industries, Siemens Energy, Eaton Aerospace, and MAN Energy Solutions SE. 

Azad's core expertise lies in the production of 3D rotating and stationary Airfoil/blade portions used in turbine engines for gas, nuclear, and thermal applications. In the Aerospace segment, the company manufactures components for Auxiliary Power Units, engines, and hydraulics catering to both commercial and defense aircraft. The company currently operates four manufacturing facilities covering an area of approximately 20,000 square meters in Hyderabad, Telangana. Furthermore, Azad Engineering is in the process of expanding its capabilities by establishing two additional manufacturing facilities with a combined capacity of 1.7 lakh square meters. 

 Objective of the IPO 

Here are a few quick reasons why company is going public:  

1. Out of the net proceeds, an amount of Rs. 138 Cr is earmarked for the repayment of existing debt. 

2. Additionally, Rs. 60 Cr is allocated for capital expenditure, specifically for the acquisition of plants and machinery. 

3. The remaining portion of the net proceeds will be directed towards general corporate purposes. 

Company Financials 

Key Performance Indicator 

Pros 

1. Operating in a highly engineered market, the Company provides products subject to a Zero-Defect Policy, highlighting the critical importance of the Company's manufacturing expertise. 

2. According to Azad's RHP (Red Herring Prospectus), the company follows a four-phase client acquisition process, spanning a period of 30 to 48 months. 

3. Evidencing strong demand, the Company is currently undergoing a substantial capacity expansion financed through internal accruals, specifically retained earnings. 

4. Furthermore, Azad has established enduring relationships, spanning over 10 years, with major global OEMs such as General Electric and Mitsubishi Heavy Industries. 

Cons 

1. In the fiscal year 2023, the company derived 65% of its revenue from its top 10 customers, with a significant portion, 33%, attributed to its largest spender. 

2. Azad also relies on imported raw materials, accounting for approximately 50% of its overall raw material needs. The top three suppliers constitute 50% of the company's revenue, and the primary supplier alone contributes 25% of the revenue. Consequently, any fluctuations in foreign currency exchange rates could have a substantial impact on the company's earnings. 

3. Moreover, the company heavily depends on exports, constituting 80% of its revenue in FY23 and 90% in H1FY24. Japan and the USA are pivotal markets, contributing 35.47% and 23.01% of the revenue, respectively. 

How to Apply for this IPO 

1. Go to https://ipo.adityatrading.in/ 

2. Enter your Client ID 

3. Enter the OTP received in your registered mobile number. 

4. Choose the IPO and click on apply button. 

5. Enter the UPI ID, Quantity, and Cut off the price. 

6. Click on submit button 

7. Confirm the mandate request received on your phone by entering the UPI Pin. 

You can also watch our youtube video on “How to Apply on IPO” by clicking on the link “https://www.youtube.com/watch?v=1qOI8dCpl1I&ab_channel=ATS”