Belrise Industries IPO subscribed 5 times on Day 3: GMP rises to Rs 23

The initial public offering (IPO) of Belrise Industries, which opened for subscription on Wednesday, was booked 4.9 times by the third and final day of bidding.

As of 10:57 AM, the IPO had received bids for 86,68,45,028 shares. The highest interest came from non-institutional investors (NIIs), who subscribed 16.91 times their allotted quota. Retail investors subscribed 2.11 times, while qualified institutional buyers (QIBs) subscribed 0.76 times.

Ahead of the issue opening, the grey market premium (GMP) for Belrise Industries rose from Rs 14–15 on Day 2 to around Rs 22–23 on Day 3, indicating a premium of about 24%.

Out of the total IPO proceeds of Rs 2,150 crore, the company plans to use Rs 1,618 crore for repaying certain borrowings, aimed at reducing interest costs and improving its balance sheet. The remaining amount will be allocated for general corporate purposes..

The IPO is being managed by a consortium of leading investment banks, including Axis Capital, Jefferies India, HSBC Securities, and SBI Capital Markets. Link Intime India has been appointed as the registrar for the issue.

Belrise Industries IPO review

Analysts said Belrise has grown healthy double digit in the past and with introduction of new products aims for similar growth trajectory going forward as well.

"With Rs 1,618 crore debt repayment on anvil from IPO proceeds, resulting in imminent annual interest costs savings of Rs 150 crore and consequent PAT gain of Rs 110 crore coupled with organic growth prospects, Belrise is well poised to clock Rs 500 crore of PAT in FY27E which makes it a lucrative offering at 16x P/E on FY27E vs 20x PE being commanded by domestic ancillary players. Henceforth, we assign a SUBSCRIBE rating on Belrise Industries," said ICICI Direct.

Belrise IPO key dates

The IPO opened for subscription on May 21 and will close on May 23. The share allotment is scheduled for May 26, while the stock’s listing is expected on May 28.

About Belrise Industries

Belrise Industries is a prominent manufacturer of safety-critical automotive components. The company specialises in producing metal chassis systems, polymer parts, suspension systems, and exhaust solutions for a wide range of vehicles, including two-wheelers, three-wheelers, four-wheelers, commercial vehicles, and agricultural vehicles.

Its customer portfolio features leading automotive brands such as Bajaj Auto, Honda, Hero MotoCorp, Royal Enfield, Jaguar Land Rover, Tata Motors, and Mahindra. As of June 2024, Belrise caters to 27 OEMs globally and operates 15 manufacturing facilities spread across nine Indian cities.

In FY24, the company reported revenue of Rs 7,555 crore and a profit after tax of Rs 352.7 crore. With its strong financial performance, well-established client base, and emphasis on EV-agnostic components, analysts believe the IPO is likely to attract significant interest from a broad spectrum of investors.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)