IPO Watch: Ardee Engineering files draft papers with SEBI for ₹580 crore issue

IPO Watch: Ardee Engineering Limited has filed its draft red herring prospectus (DRHP) with the capital market regulator, Securities and Exchange Board of India (SEBI), for an initial public offering (IPO) to raise ₹580 crore.

Ardee Engineering is a comprehensive design, engineering, and manufacturing firm that operates with three main business sectors: pre-engineered buildings (PEB), material handling systems (MHS), and engineering services.

Founded in 2008 as a partnership, Ardee has attracted key clients, including renowned blue chip companies such as ArcelorMittal Nippon Steel India Limited (AM/NS), JK Cement Limited, Navayuga Engineering Company Limited, and Udaipur Cement Works Limited, among others.

With a broad clientele across various industries like e-commerce and logistics, electronics manufacturing, defense, aerospace, steel production, construction, power generation, and mining, Ardee caters to its customers through five strategically positioned manufacturing facilities in Andhra Pradesh and Telangana.

As of March 31, 2024, the company has a total production capacity of 44,144 metric tonnes per annum (MTPA). For the fiscal year 2024, Ardee reported operational revenue of ₹620 crore, with a profit after tax (PAT) of ₹29 crore.

IPO Details

As per the Draft Red Herring Prospectus (DRHP), the Initial Public Offering (IPO) of the company based in Hyderabad includes a fresh issue of equity shares totaling up to ₹500 crore, along with an Offer for Sale (OFS) of equity shares amounting to ₹80 crore from the Promoter Selling Shareholder, Chandra Sekhar Moturu.

Ardee plans to allocate ₹279.6 crore from the net proceeds of the fresh issue for capital expenditure aimed at establishing two new manufacturing plants in Seetharampur, Telangana; ₹44.8 crore to support the capital expenditures for a new integrated manufacturing facility in Parawada, Andhra Pradesh; ₹65 crore for the repayment or prepayment, in whole or in part, of certain existing borrowings taken by the company, with the remainder being used for general corporate purposes.

The company may conduct a Pre-IPO placement of specific securities totaling up to ₹100 crore before submitting the Red Herring Prospectus (RHP) to the Registrar of Companies (RoC). If the Pre-IPO placement is completed, the total size of the fresh issue will be decreased by the amount raised through this placement.

IIFL Capital Services Limited and JM Financial Limited serve as the lead managers overseeing the book for the issue.

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