GNA Axles Plans IPO, Files DRHP

Punjab-based GNA Axles Limited filed its Draft Red Herring Prospectus with the stock market regulator SEBI seeking permission for its Initial Public Offer (IPO).

The IPO consists of up to 6,300,000 equity shares with a face value of Rs 10 each at a price to be decided later, comprising of a net issue to the public of 6,100,000 Equity Shares and a reservation of 200,000 Equity Shares for subscription by Eligible Employees.

The issue will constitute 29.35% of the post-issue paid-up capital of the Company and the net issue will constitute 28.42% of the post-issue paid-up capital of the Company.

The Net Proceeds from the Issue will be utilised for the purchase of plant and machinery, to meet the working capital requirements and for general corporate purposes. The Company proposes to utilise Rs. 800.73 million towards purchase of plant and machinery and Rs. 350.00 million towards meeting working capital requirements.

The promoters of the company are Mr. Jasvinder Singh Seehra, Mr. Ranbir Singh and Mr. Gurdeep Singh.

PNB Investment Services Limited and Ambit Corporate Finance Private Limited are the Book Running Lead Managers and Link Intime India Private Limited is the Registrar to the issue. The shares will be listed on the NSE and BSE.

About GNA Axles:

Established in 1993, GNA Axles Limited is amongst India’s leading manufacturers of rear axle shafts for the on-highway (HCV, MCV, LCV etc) and off-highway vehicular (including, agricultural tractors and machinery) segments. Since its first supplies in 1995 and first exports in 2002-2003, the Company has grown to production levels of more than 1.97 million components in fiscal 2015. Besides rear axle shafts, the Company also manufactures solid and hollow spindles used in the axle assembly for various vehicles and equipments in the on-highway segment which we supply to our export customers.

GNA Axles manufactures a diverse range of rear axle shafts, other shafts and spindles for light commercial vehicles (LCVs), medium commercial vehicles (MCVs) and heavy commercial vehicles (HCVs) and other transport vehicles such as buses. The Company also manufactures a diverse range of rear axle shafts and other shafts for the off-highway segment such as agricultural tractors and machinery, forestry and construction equipments, electric carts and other specialty vehicles used in mining and defense sectors.

The Company’s primary customers include original equipment manufacturers (“OEMs”) as well as tier-1 suppliers to OEMs. The Company’s domestic customers in the on-highway segment include major tier-1 suppliers such as Automotive Axles Limited and Dana Limited and HCV manufacturers such as Meritor HVS AB. In the off-highway segment the Company’s domestic customers include Mahindra & Mahindra Limited, TAFE, Escorts Limited and Claas India Private Limited. The Company also exports rear axle shafts, other shafts and spindles to various countries including USA, Sweden, Turkey, Brazil, Italy, Germany, Spain, Mexico, Japan, UK, France, China and Australia. Their major global customers include Meritor HVS AB, John Deere, Transaxle Manufacturing of America, Dana Limited and Kubota Corporation.

The Company has two manufacturing facilities located in Punjab, both of which are ISO/TS 16949:2009 certified for manufacture of rear axle shafts, other shafts and spindles for automotive applications.. The manufacturing facilities include machinery imported from various countries including Italy, Germany, Japan, China and Taiwan. The machineries enable GNA Axles to manufacture rear axle shafts of up to input weight of 165 kg.

For Fiscal 2015, total revenue and net profit of the Company were ₹ 4,306.44 million and ₹ 215.98 million, respectively. Domestic sales and export sales constituted 51.67% and 48.33% of their revenue from operations, respectively.

Disclaimer: G N A Axles Limited is proposing, subject to receipt of requisite approvals, market conditions and other considerations, to make an initial public offer of its equity shares and has filed a draft red herring prospectus (“DRHP”) with the Securities and Exchange Board of India. The DRHP is available on the website of SEBI at www.sebi.gov.in as well as on the websites of the Book Running Lead Managers, PNB Investment Services Limited and Ambit Corporate Finance Private Limited at www.pnbisl.com and www.ambit.co, respectively.