GNA Axles IPO review (Subscribe)

Review By Dilip Davda on Sep 7, 2016

GNA Axles Ltd (GNA) is today among the leading manufacturers of rear axle shafts used in on-highway and off-highway vehicular segments in. Since its first supplies in 1995 and first exports in 2002-2003, GNA has grown to production levels of more than 2.26 million components in Fiscal 2016. The company manufactures and supplies a diverse range of rear axle shafts, other shafts and spindles for the on-highway segment, i.e. for light commercial vehicles (“LCVs”), medium commercial vehicles (“MCVs”) and heavy commercial vehicles (“HCVs”) and other transport vehicles such as buses. It also manufactures and supplies a diverse range of rear axle shafts and other shafts for the off-highway segment, i.e. for agricultural tractors and machinery, forestry and construction equipments, electric carts and other specialty vehicles used in mining and defense sectors. The company also manufactures solid and hollow spindles used in the axle assembly for various vehicles and equipments in the on-highway segment which is supplied to export customers. The company claims to be the only well organized robotic manufacturing company providing all Shaft related services under one roof.

To part finance purchase of plant and machinery as well as raise working capital and general corpus fund, the company is coming out with a maiden IPO of 6300000 equity shares of Rs. 10 each via book building route in a price band of Rs. 205-207 to mobilize Rs. 130.41 crore (bases on upper price band). From the issue, it has reserved 200000 equity shares for its employees. Issue opens for subscription on 14.09.16 and will close on 16.09.16. Minimum application is to be made for 70 shares and in multiples thereon, thereafter. The company has issued all equity shares at par since inception till March 1997 and two bonus issues in the ratio of 1 for 1 in March 2006 and 9 for 1 in Marcy 2007. Post IPO its current paid up equity capital of Rs. 15.17 cr. to Rs. 21.47 cr. BRLMs to the issue are PNB Investment Services Ltd and Ambit Pvt Ltd. Link Intime India Pvt Ltd is the registrar to the issue. Post allotments, shares will be listed on BSE and NSE.

On performance front, for last four fiscals, the company has (on a consolidated basis) posted turnover/net profits of Rs.349.05 cr. / Rs. 4.81 cr. (FY13), Rs. 404.25 cr. / Rs. 13.27 cr. (FY14), Rs. 430.64 cr. / Rs. 21.60 cr. (FY15) and Rs. 509.94 cr. / Rs. 25.96 cr (FY16). Its export revenue increased in the total turnover for all these years from 33.91% to 54.71%. Its client list includes OEMs like Mahindra and Mahindra, Automotive Axles, John Deere India etc. If we attribute the latest earnings on expanded equity post IPO, then asking price is at a P/E of 17 plus. The company has no peers to compare with it in total model basis, however; it has stated Talbros Engg as its peer as it operates in one of the segment that is trading around 16 P/E.

On merchant banker’s front, Ambit Finance has not handled any issue in last three years. PNB has just one IPO of Dilip Buildcon in the recent past that gave returns on listing day.

Conclusion: Listing of the company will be in T group and hence speculative movement is ruled out. However, considering its niche play with rising top and bottom line and major thrust on exports, long term investors may consider investment in this issue.


Conclusion / Investment Strategy

Listing of the company will be in T group and hence speculative movement is ruled out. However, considering its niche play with rising top and bottom line and major thrust on exports, long term investors may consider investment in this issue.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Sep 7, 2016

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at its own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com

GNA Axles IPO FAQs

  1. 1. Why GNA Axles IPO?

    The initial public offer (IPO) of G N A Axles Ltd offers an early investment opportunity in G N A Axles Ltd. A stock market investor can buy GNA Axles IPO shares by applying in IPO before G N A Axles Ltd shares get listed at the stock exchanges. An investor could invest in GNA Axles IPO for short term listing gain or a long term.

  2. 2. How is GNA Axles IPO?

    Read the GNA Axles IPO recommendations by the leading analyst and leading stock brokers.

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  3. 3. GNA Axles IPO what should investors do?

    GNA Axles IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the GNA Axles IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is GNA Axles IPO good?

    Our recommendation for GNA Axles IPO is to subscribe.

  5. 5. Is GNA Axles IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the GNA Axles IPO.

  6. 6. When will GNA Axles IPO allotment status?

    The GNA Axles IPO allotment status will be available on or around Sep 21, 2016. The allotted shares will be credited in demat account by Sep 23, 2016. Visit GNA Axles IPO allotment status to check.

  7. 7. When will GNA Axles IPO list?

    The GNA Axles IPO will list on Monday, September 26, 2016, at BSE, NSE.








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