Belrise Industries Wipes Out Gains after 11% Premium Debut

Belrise Industries IPO: The auto component manufacturer made a decent debut on the bourses after listing 11% above its issue price of Rs 90. Belrise Industries Ltd.'s initial public offering (IPO) witnessed robust investor interest during the bidding period as the issue was oversubscribed 41.30 times.

On Wednesday, the shares of Belrise Industries plummeted over 4% from the listing price of Rs 100, erasing initial gains made during the morning trading session. This might signal a shift to profit booking by D-street investors.

As for the secondary market, benchmark indices were trading on a volatile note, albeit in the red territory on Wednesday. The BSE Sensex index was trading at 81,320.92 level mark, down by over 235 points or 0.28%. Whereas the NSE Nifty50 index trading around 24,750 level, down by nearly 70 points or 0.28% at 11:28 am.

The public offering is worth Rs 2,150 crore with no offer for sale (OFS) and only a fresh issue of 23.89 crore shares. Axis Capital Limited, HSBC Securities and Capital Markets Pvt Ltd, Jefferies India Pvt. Ltd and SBI Capital Markets Ltd were the book running lead managers of the IPO.

The net proceeds will be used for repayment of certain loans taken by the company and other general corporate purposes. The company is among the leading auto component manufacturing firms, providing a diverse product range. Belrise Industries has around 24% market share in the two-wheeler segment.

For the 9 months ending December 31, 2024, Belrise Industries recorded a revenue of Rs 6,064 crore. Profit after tax (PAT) stood at Rs 245 crore. However, 7 out of their 17 manufacturing facilities are located in the Maharashtra region, which gives rise to some level of regional risk. Plus, a good chunk of Belrise Industries Ltd.'s overall revenue comes from the 10 largest customers.

However, on an overall basis, several brokerages maintained a positive outlook on the IPO, recommending a 'Subscribe for long term' rating.