HNIs and corporates buoy GNA Axles’ IPO with 53x oversubscription

By TEAM VCC

  • 16 Sep 2016

Rear axle shafts maker GNA Axles Ltd saw its initial public offering (IPO) recording bumper oversubscription led by investor interest from high net-worth individuals and corporates.

The IPO that closed on Friday saw bid for 54 times the shares on offer or was oversubscribed 53x, stock market data shows.

HNIs and corporates bid for 217 times the number of shares reserved for them; institutional investors’ portion was covered over 17 times while retail investors bid for a little over 10 times their portion.

The IPO, which is being managed by PNB Investment Services Ltd and Ambit Pvt. Ltd, was oversubscribed with one day to spare.

The firm had earlier raised Rs 37.8 crore from a string of mutual funds run by Reliance Capital, HDFC and UTI.

GNA Axles separately offered to sell 4.47 million shares in the public issue. Given the oversubscription, the IPO (including anchor allotment) would fetch the firm around Rs 130 crore.

The firm issued shares representing 29.35% of the post IPO capital base, which would give it a market capitalisation of around Rs 444 crore.

Established in 1993, GNA Axles is a large manufacturer of rear axle shafts. It manufactures and supplies rear axle shafts besides other shafts and spindles for commercial vehicles and for agricultural tractors and machinery, forestry and construction equipment, electric carts and other specialty vehicles used in mining and defense sectors. It also manufactures solid and hollow spindles used in the axle assembly for various vehicles.

Its customers include M&M, John Deere, Tractors and Farm Equipment or TAFE, and tier-1 suppliers to OEMs such as Automotive Axles, Meritor and Dana. In 2015-16 domestic sales and export sales constituted 45.29% and 54.71% of its revenues, respectively.

The company also exports rear axle shafts, other shafts and spindles to various countries including USA, Sweden, Turkey, Brazil, Italy, Germany, Spain, Mexico, Japan, UK, France, China and Australia.

GNA Axles’ revenues rose from Rs 425.8 crore in 2014-15 to Rs 502.5 crore in the year ended 31 March 2016. In the same period its net profit rose 20% to Rs 26 crore.

Like this report? Sign up for our daily newsletter to get our top reports.