GNA Axles IPO: Issue oversubscribed 1.36 times; here is what brokerages are saying

GNA Axles, one of the 17 companies to approach the primary market via initial public offering (IPO) this year, saw its Rs. 130 crore public issue oversubscribed 1.64 times until afternoon on the second day on Thursday. The issue closes on Sept. 16, 2016 (Friday) and the price band is Rs. 205-207 per share.

The company had earlier raised Rs. 38 crore from anchor investors at Rs. 207 per share.

The company's IPO is concurrent with that of another firm, L&T Technology Services, whose public issue opened on Sept. 12 and closes on Thursday, Sept. 15. The firm had received 71 percent subscription for its approximately Rs. 900 crore issue by the end of the third day (Sept. 14), according to data available with the stock exchanges.

Another IPO, of ICIC Prudential Life Insurance, will hit the markets on Sept. 19 and close on 21. The price band is Rs. 300-334 per share and the issue size is in the range of Rs. 5,440 crore to Rs. 6,057 crore.

GNA Axles, which was established in 1993, is a Punjab-based manufacturer of rear axle shafts, other shafts and spindles used in on-highway and off-highway vehicles.

The company commenced domestic supplies in 1995 and exports in 2003 and generated about 54 percent of its revenues from exports in the financial year 2015-16. 

Here is what Angel Broking and Kotak Securities have to say about GNA Axles Limited (GNAAL):

GNAAL's export revenue is constituted by America (~49 percent), Europe (~33 percent), the Asia Pacific (~18 percent), and the balance is accounted for by Australia.

Major clients include Meritor HVS AB, John Deere, Transaxle Manufacturing of America, Dana Ltd and Kubota Corporation.

GNAAL has two manufacturing facilities: Unit I located in Hoshiarpur, Punjab and Unit II located at Kapurthala, Punjab.

GNAAL's manufacturing units had a total annual manufacturing capacity of 2.3mn rear axle shafts, 0.4mn other shafts and 0.3mn spindles as of March 31, 2016.

GNA Axles IPO snapshot

Issue size: 63 lakh shares, including 2 lakh shares reserved for employees

Price band: Rs. 205-207 per share

Book runners and managers: PNB Investment Services Ltd and Ambit Private Ltd.

Lisiting: Shares to be listed on NSE, BSE

Promoters' holding, post issue: 70.7 percent

Objects of the issue: Purchase of plant and machinery, working capital requirement and general corporate purposes.