Belrise Industries IPO: Should You Subscribe? — Read Anand Rathi's Analysis

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Anand Rathi Report

Belrise Industries Ltd. will launch its initial public offering on May 21 and the offer closes for subscription on May 23. An automotive component manufacturing company has fixed the price band in the range of Rs 85-90 Apiece. The minimum order bid lot is 166.

The Rs 2,150 crore IPO comprises only of fresh issue with no component of offer-for-sale.

Objects of the Issue

1. Repayment/pre-payment, in full or in part, of certain outstanding borrowings availed by the company.

2. General corporate purposes.

Valuation & Outlook

Belrise Industries is a leading automotive component manufacturer in India, specializing in safety-critical systems and engineering solutions for two-wheelers, three-wheelers, four-wheelers, commercial vehicles, and agricultural vehicles.

The company produces a wide range of products, including automotive sheet metal and casting parts, polymer components, suspension and mirror systems, metal chassis systems, body-in-white components, and exhaust systems.

As of FY24, they rank among the top three companies in India’s twowheeler metal components segment, holding a 24% market share based on revenue.

With a strong track record in process engineering and technology adoption, they strive to uphold high manufacturing excellence across all their facilities.

At the upper band, the company is valued at 26x its FY24 EPS. Following the issuance of equity shares, the company's market capitalization 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 EV’s, four-wheelers as commercial vehicles.

We believe that the issue is fairly priced and recommend “Subscribe – Long Term” rating to the IPO.

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