In a bold move, Azad Engineering, a multibagger company in precision manufacturing, has announced plans to raise INR 1,000 crore via different channels. This decision, green-lit by the Board of Directors on 03 January 2025, aims at fueling the company’s growth, expanding its footprint, and securing a stronger market stance. The strategy reflects Azad’s foresight in leveraging increasing market demand and enhancing its global presence.
Azad Engineering – Fundraising Plan and Strategy
The company has outlined a multi-faceted approach to raise the needed capital. Options on the table include:
- Issuing equity shares,
- Offering convertible preference shares,
- Floating fully or partly convertible debentures,
- Launching non-convertible debentures,
- Providing warrants with conversion rights.
The capital could be raised through various channels like public offerings, private placements, or Qualified Institutional Placements (QIP). There’s flexibility in the plan, allowing for multiple tranches of issuance, potentially with or without a green shoe option, depending on how the market shapes up and investor interest. This plan, however, still needs the nod from shareholders and regulatory bodies.
Azad Engineering is also in talks with institutional investors to bolster the fundraising’s success and diversify its financial backing. This strategic flexibility is key in navigating the ever-changing market dynamics.
Purpose of Fundraising
The hefty sum of INR 1,000 crore is earmarked for several strategic initiatives:
- Expanding the business and upgrading infrastructure.
- Enhancing manufacturing capabilities with cutting-edge technology.
- Paying off existing debt and managing working capital.
- Pursuing strategic acquisitions and partnerships.
- Tapping into new markets both at home and abroad.
- Setting up research and development hubs to spur innovation.
Azad Engineering’s focus here is clear: growth, innovation, and staying competitive. The company is aiming to expand and adopt advanced tech to boost efficiency and meet market demands sustainably.
Employee Stock Option Scheme (ESOP)
In tandem with these growth plans, Azad has introduced a new ESOP, compliant with SEBI’s Share Based Employee Benefits Regulations, 2021. It involves:
- Allocating 11,82,259 equity shares,
- Setting out specific vesting periods and exercise windows.
This scheme is designed to not just reward but also align employee interests with the company’s long-term vision, helping retain and attract top talent. By offering equity, Azad Engineering aims to foster a culture where employees feel invested in the company’s success, driving performance and engagement.
Azad Engineering – Leadership Appointments
To navigate this expansive growth phase, Azad has reinforced its leadership:
- Mr. Murali Krishna Bhupatiraju steps in as Managing Director, with his 25 years of experience in operations, finance, and engineering.
- Mr. Deepak Kabra joins as an Independent Director, bringing his banking, finance, and SME sector expertise.
These appointments are crucial for steering the company through its ambitious plans, utilizing their vast experience to enhance strategy and performance.
Closing Thoughts
By deciding to raise such a significant amount, Azad signals its confidence in future growth and market opportunities. The funds are set to expand operations, meet rising demand, and keep the company ahead in the precision engineering field.
With an eye on sustainability, Azad plans to set new industry standards by expanding into the aerospace, defence, and energy sectors, thus diversifying its revenue sources. The approach involves using advanced technologies and eco-friendly practices to cater to evolving market needs, ensuring both agility and adaptability in a dynamic market.
Azad Engineering made its stock market debut on December 28, 2024. The offering comprised a combination of a fresh issue and an offer for sale, with a total issue size of INR 740 crore. Upon listing, the stock delivered an impressive return of 29.29% to investors. Subsequently, it transformed into a multibagger, tripling investors’ wealth within a year.
