Harsha Engineers IPO Review

Harsha Engineers International’s (HEI) IPO ( Harsha Engineers IPO) will open for subscription on Wednesday, September 14, and close on September 16. The price band is fixed at Rs 314-330.The Ahmedabad based bearing cages manufacturer, plans to raise Rs 455 crore through a fresh issue of shares, and Rs 300 crore via an offer-for-sale.. Harsha Engineers International Limited* is a TPM certified Precision Engineering Company manufacturing Bearing Cages and Stamped Components. Harsha Engineers is India’s largest manufacturer of precision bearing cages, in terms of revenue and is also aglobal player. 

Bidding date14th – 16th Sep 2022
Fresh Issue in (₹ Cr)455
OFS in (₹ Cr)300
Issue Size ₹ 755 Cr
Issue Size  (Shares)228,86,642 – 240,53,307
Face Value10
Bid Lot shares45
Price Band₹  314 – 330
Issue Structure :
NIB15%, 3,43,29967  shares
Retail35%,  80.1 Lac shares
Appl. for 1x Retail1.78 Lac


Harsha Engineers IPO Review: Video in Presentation form

About Harsha Engineers International

  • Largest manufacturer of precision bearing cages, in terms of revenue in organized sector in India, and good share of Global market.
  • Rajendra Shah, Harish Rangwala, Vishal Rangwala, and Pilak Shah are promoters of the company.
  • Harsha’s business comprises:
  • engineering business: manufactures bearing cages (in brass, steel and polyamide materials), complex and specialized precision stamped components, welded assemblies and brass castings and cages & bronze bushings
  • Solar EPC business: comprehensive turnkey solutions
  • Has 5 manufacturing facilities at Changodar and Moraiya, near Ahmedabad , two in Changshu, China and Ghimbav Brasov in Romania.
  • Wide range of bearing cages starting from 20 mm to 2,000 mm diameter Bearing cages find application in automotive, railways, aviation, construction, mining, agriculture, electrical, renewables sectors etc.
  • Supplies products to customers in over 25 countries covering continents North, South America, Europe, Asia and Africa.
  • 20 warehouses spread across 20 locations globally including Europe, US, China and South America.
  • Over 10 years of operating history in Solar EPC , O&M segment with installation of more than 402 MW solar power capacity. ~ 6.28% of revenue from Solar EPC

Bearings components illustration

The bearing cage category comprises of roller cages and ball bearing cages.
The cages offer high rigidity, strength and high heat resistant operating conditions.
Due to critical function of a bearing cage, and quality requirements, global bearing companies have steadily increased outsourcing manufacture of bearing cages to a few bearing cage manufacturers.

The global bearing cages is estimated at about 5% of the global bearings market.

Anchor Book: Harsha Engineers IPO

Harsha Engineers IPO got a good response from anchor investors. 56.87% of the total allocation to Anchor Investors) were allocated to 9 domestic mutual funds through a total of 17 schemes. Some select Investors

Harsha Engineers IPO: Financials

Particulars / Rs. Cr31-Mar-2231-Mar-2131-Mar-20
Revenue from Operations1,321.5873.8885.8
EBITDA Margin14.12%14.30%11.29%
Profit/(Loss) After Tax91.945.421.9
PAT Margin6.87%5.18%2.44%
Equity Share Capital77.255050
Net Worth527.90433.20378.00
Total Borrowings384.90356.70419.10
Basic EPS16.069.096.26
Post Issue share Cap91.04  
FV in Rs.10  
IPO price330  
EPS post IPO9.94  
Market Cap Rs. Cr.3050  

Harsha Engineers IPO: Salient Points

  • This is Harsha Engineers’ second attempt to go public.
  • It had draft papers in August 2018 but later shelved the plan.
  • The period was marked by IL&FS crisis too.
  • Post the IPO Promoters will hold 74.61% . 25% dilution
  • Rs.455 cr is fresh issue for debt repayment (Rs. 270 cr), capex (Rs. 78 cr)
  • Of Harsha’s engineering business in FY22, ~ 32.4%  Revenue came from India and 67.6% from outside.
  • Of outside India engineering business revenue 40.4%, 13.9%, 6.7% and 6.5% is accounted for by Europe,  China, America and others.
  • For FY22, capacity utilization was 62%.
  • Net debt to equity ratio of 0.65:1 ànd 0.07:1 post IPO.
  • Harsha Engineers International carried a consolidation exercise


  • Exposed to foreign currency exchange rate fluctuations,
  • Top 5 clients contribute ~ 70% of revenue from operations.
  • Solar EPC operations exposed to certain risks including construction cost price fluctuation, equipment defects


Company / Rs. Cr.FV (₹)Revenue FY22EBITDAEBITDA%RONW (%)P/E ( 31-03-22)P/E now
Harsha Engineers101,321.50186.614.1%17.42%33.232.7
Timken India10220352523.8%19.74%69.365.3
SKF India Limited10366656015.3%20.95%59.2154.2
Rolex Rings10101724023.6%24.21%36.0435.5
Sundaram Fasteners1490283817.1%17.42%39.3839.4

Harsha Engineers IPO: Assessment

  • Largest manufacturer of precision bearing cages in India with ~50% market share Indian bearing cages market in the organized segment.
  • Market share of 6.5% in the global organized bearing brass, steel and polyamide bearing cages market in CY 2021.
  • Company is a comprehensive solution provider offering a diversified suite of precision engineering products across geographies and end-user industries.
  • Long-standing relationships with leading clientele.
  • Supplies to each of the Top-6 global bearing manufacturers. Their Top-10 customers contributed 44.70%, 48.24%, and 47.79% of their total revenue from operations for Fiscal 2022, 2021 and 2020 respectively.
  • Average age of relationship with Top-5 customers spans more than a decade.
  • Strategically located domestic and international production facilities and warehouses. Expertise in Tooling, design, development and automation.
  • Strategically located manufacturing facilities help it cater to the global markets cost-effectively and efficiently.
  • Harsha Engineers International has a consistent track record of growth and financial performance.
  • Experienced management team and qualified workforce.
  • Harsha Engineers International recently expanded  product portfolio to introduce sand-casting; value-added stamping components, bronze bushings etc. to cater to more end user industries such as wind, mining and shipping.
  • The IPO price looks reasonable at P/E of 32.7x given good tailwinds for Bearing industry in India & company’s past performance and future prospects.

Harsha Engineers IPO: Apply or Not

Risk  :  Very Low or Nil

Expected Reward   :  Moderate to Good Profit 

Listing Gains  :   Reasonable to Good Listing.  Current GMP Rs. 200+

Hold for Medium/ Long Term:  Uniquely positioned. Good Tailwinds

Subscription  :  Expected to be High across all categories

I will apply in this IPO on Day 1.

Above are my views only. Please do your own diligence.

Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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