Azad Engineering is a renowned company in the aerospace and defence sector. The company is all set to launch a QIP worth INR 700 crore to improve its balance sheet and expand its business. The company has set a price of INR 1,280 per share for QIP which is 1.8% lower than SEBI’s floor price of INR 1,309.08.
Shares of Azad Engineering dropped nearly 30% in 2025 after an impressive rally of 166% in the year 2024 due to ongoing market conditions. Notably, the company’s decision to raise money via QIP also underscores its belief in its strong fundamentals and leadership capabilities. Let’s dig deeper into the matter.
Breaking Down Azad Engineering QIP
- Equity Dilution: 8.5%
- Face Value: INR 2 per share
- Lock-in Period: 60 days
- Potential Discount: Up to 5% on the floor price
- Board Approval Date: 25 February 2025
Azad Engineering QIP got greenlit earlier this week. This aligns with the company’s intent to increase its presence across the aerospace, energy, and defence sectors. The company will invest newly raised money in new projects, possible acquisitions, and further R&D investments. Notably, this is Azad’s first significant fundraising effort since their IPO in December 2023.
Stock Market Chatter & Price Swings
Azad Engineering QIP announcement triggered mixed reactions in the stock market. On 27 February, Azad Engineering’s shares are 4.3% down on NSE. This drop comes after a brief rally in the previous trading session when the stock closed at INR 1,352 per share.
Analysts believe that investors are taking precautionary measures because of the short-term impact of dilution against the long-term growth prospects this fundraiser brings. The real test, they argue, will be how effectively the company deploys these funds. Given the macro uncertainties and capital market fluctuations, investor sentiment remains cautious, though institutional participation could tip the scales in Azad’s favour.
Aiming Higher: Expansion, Contracts & Growth Strategy
This QIP isn’t just about shoring up finances—it’s part of Azad Engineering’s broader strategy to scale up its global footprint. Just this month, the company inked a long-term deal with Rolls-Royce to supply aircraft engine components, a move that further cements its role in aviation supply chains. This follows its INR 811-crore agreement with Siemens Energy in January for precision-engineered components.
The company is positioning itself as the go-to supplier of components for the renewable energy and defence sectors. Azad is investing in modernizing and expanding its production capacity.
Institutional Confidence: Who’s Backing the QIP?
A key indicator of success for this capital raise will be the level of institutional investor interest. Currently, major foreign institutional investors (FIIs) hold a substantial stake in the company, including:
- Abu Dhabi Investment Authority: 14,30,132 shares
- Nomura Trust & Banking: 6,79,885 shares
- Nomura Ireland Public Ltd: 8,51,374 shares
- Tree Line Asia Master Fund (Singapore): 9,00,000 shares
Given this strong institutional backing, analysts will be watching closely for any changes in shareholding post-QIP. A robust response from existing and new investors could signal confidence in Azad’s trajectory and set the stage for future fundraising rounds.
QIP vs IPO: A Smart Fundraising Play?
Unlike IPOs, which are open to retail investors, QIPs are exclusively reserved for institutions, allowing companies to raise capital with less regulatory friction. The 60-day lock-in period ensures that investors have some skin in the game, but the real question is how they react once that period ends.
Final Take: A Big Bet on the Future
As we all know macroeconomic challenges are affecting markets badly, Azad Engineering QIP is a bold test of investors’ sentiments. If the company’s plans are well-executed then this QIP could be a turning point for the company. However, investors should make a well-thought decision before making any investment decision.
Azad Engineering IPO made its stock market debut on 28 December 2024. The issue was a mix of a fresh issue and an offer for sale, with a total issue size of INR 740 crore. On the listing day, the stock delivered a return of 29.29% to investors. Subsequently, it transformed into a multibagger, tripling investors’ wealth within a year.
One thing is clear: Azad Engineering isn’t just raising capital—it’s making a calculated bet on its future as a leader in high-precision engineering. Now, it’s up to the markets to decide whether they’re ready to buy into that vision.