Belrise Industries, an automotive component manufacturer based in Pune, has filed for an initial public offering (IPO) aiming to raise ₹2,150 crore. This IPO will consist entirely of fresh equity shares, with no offer-for-sale component, as detailed in the company’s draft red herring prospectus (DRHP) submitted to the Securities and Exchange Board of India (SEBI) on November 20, 2024.
Purpose of the IPO
The primary objective of the IPO is to reduce the company’s significant debt burden. Specifically, ₹1,618 crore of the proceeds will be allocated towards debt repayment, which constitutes approximately 62.52% of Belrise’s total borrowings of ₹2,463 crore as of June 2024[1][2]. The remaining funds will be used for general corporate purposes. Additionally, Belrise is considering a pre-IPO placement that could raise up to ₹430 crore, which would subsequently reduce the size of the fresh issue.
Company Overview
Founded in 1996, Belrise Industries specializes in precision sheet metal pressing and fabrication for various vehicle subsystems and bodies. The company serves a diverse range of sectors including two-wheelers, three-wheelers, four-wheelers, commercial vehicles, and agricultural vehicles. Its product portfolio includes metal chassis systems, polymer components, suspension systems, and exhaust systems.
Belrise has established long-standing relationships with several prominent multinational OEMs such as Bajaj Auto, Honda Motorcycle & Scooter India, Hero MotoCorp, Jaguar Land Rover, and Royal Enfield Motors. The company operates 15 manufacturing facilities across eight states in India and has a market presence extending to international markets including Austria, Slovakia, the UK, Japan, and Thailand.
Financial Performance
In terms of financial performance for FY24, Belrise reported a revenue increase of 13.7%, reaching ₹7,484.24 crore compared to ₹6,582.50 crore in the previous fiscal year. However, its net profit slightly declined by 0.9%, amounting to ₹310.88 crore from ₹313.66 crore in FY23. For the quarter ending June 30, 2024, the company recorded a revenue of ₹1,780.97 crore and a profit after tax of ₹71.58 crore.
Belrise Industries is poised to strengthen its financial position through this IPO by addressing its debt levels while continuing to expand its operations both domestically and internationally. The involvement of notable investment banks such as Axis Capital and HSBC Securities as book-running lead managers further underscores the anticipated interest in this offering.