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The initial public offering (IPO) of Belrise Industries is set to hit the Street on Wednesday, May 21. Ahead of the market debut, shares of the company are trading at a Grey market premium (GMP) of 14.44% or Rs 13-14.
The GMP refers to the premium at which the shares of an upcoming IPO are traded in the unlisted market before their official listing on the stock exchange.
A positive GMP usually indicates a strong demand for the IPO shares and suggests that the stock is likely to list at a higher price than the IPO price, while a negative GMP indicates a weak demand and suggests a lower listing price than the IPO price.
GMP is typically considered a speculative indicator and is not an official metric, but it provides a general market sentiment about the potential listing price of the IPO shares.
About Belrise Industries IPO
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The entire issue comprises a fresh offer amounting to Rs 2,150 crore, with no offer-for-sale component. Of the total offer, 50% is reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and 35% for retail investors.
The Pune-based auto component manufacturer Belrise Industries has fixed the price band for its Rs 2,150 crore initial public offering (IPO) at Rs 85-90 per share. Investors can bid for a minimum of 166 equity shares and in multiples thereafter.
Axis Capital, HSBC Securities, Jefferies India, and SBI Capital Markets are the book-running lead managers, while Link Intime India is the registrar.
About Belrise Industries
Belrise Industries is an automotive component manufacturing company based in India offering a diverse range of safety critical systems and other engineering solutions for two-wheelers, three-wheelers, four-wheelers, commercial vehicles and agri-vehicles.
The company’s revenue from operations increased at a CAGR of 17.76% to Rs 7,484.24 crore in FY2024, from Rs 5,396.85 crore in FY2022. For the 9 months period ended December 31, 2024, the revenue from operations increased by 0.93% y-o-y to Rs 6,013.43 crore, increasing from Rs 5,957.88 crore for the 9 months period ended December 31, 2023.
Also read: Borana Weaves IPO opens for subscription with healthy GMP. Should you bid?
Should you subscribe Belrise IPO?
This is the third mainboard IPO of the current financial year, following Ather Energy and Borana Weaves.
Here is what analysts suggest for the Belrise IPO:
Anand Rathi
Domestic brokerage firm Anand Rathi have a ‘subscribe- long term’ rating for the Belrise IPO.
At the upper band, the company is valued at 26x its FY24 EPS. Following the issuance of equity shares, the company’s market capitalisation stands at Rs 80,089 million, with a market cap-to-sales ratio of 1.07 based on its FY24 earnings.
The company is focusing on increasing its Content per Vehicle, along with focusing on EVs, 4-wheelers as Commercial Vehicles. The analysts at Anand Rathi believe that the issue is fairly priced.
SBI Securities
The company is valued at a FY24 P/E multiple of 24.8x at post- issue capital of the upper price band. The company’s Revenue/EBITDA/PAT achieved CAGR of 17.8%/10.7/9.0% to Rs 7,484 cr/Rs 925 cr/Rs 323 cr during the FY22-FY24 period.
The industry forecast indicates a decent growth for the 2W/3W industry (Domestic and Export) and is projected to expand at a CAGR of 8%/5%-7% during FY24-FY30E/FY25E-FY30E period, respectively.
Additionally, the company is likely to repay debt amounting to Rs 1,618 cr in FY26, thus lowering D/E below 1.0x.
Choice Broking
Brokerage firm Choice Broking has issued a ‘subscribe’ rating for the Belrise Industries’ IPO.
The company stands out as a distinguished market leader in sheet metal pressing and fabrication within the automotive component industry. Its competitive edge is further strengthened by vertically integrated manufacturing facilities that support a broad range of product offerings and robust process engineering capabilities driven by innovation and technology.
Additionally, the company benefits from long-standing customer relationships nurtured over years of collaboration and value creation. Its largely EV-agnostic product portfolio places it in a strong strategic position to expand alongside the rapidly growing electric vehicle market in India.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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