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Belrise Industries IPO – Detailed Analysis and Opinion

  • Writer: Shubham Bhatia
    Shubham Bhatia
  • May 22
  • 3 min read

Updated: Jul 11

Exploring Belrise Industries: An Investment Opportunity in the Auto Sector


The auto sector has faced challenges over the past few quarters. While some companies have managed to maintain their position, many have experienced corrections of up to 50%. However, despite this cyclical slowdown, the long-term outlook for the auto and EV ecosystem remains robust. This is particularly true with the increasing shift toward electrification and localization of components.


Company Overview: Belrise Industries


Belrise Industries

Belrise Industries is a Tier-1 automotive component manufacturer. The company has a strong presence in both the two-wheeler (2W) and four-wheeler (4W) segments. Established over three decades ago, Belrise is currently led by the second generation of promoters, with the third generation now driving initiatives in the electric vehicle (EV) components sector.


Key Highlights


  • Experience: Over 30 years in automotive manufacturing.

  • Infrastructure: 15 manufacturing facilities and more than 2,000 employees.

  • Revenue: Approximately ₹7,500 crore in annual turnover.

  • Product Portfolio: Focused on standard automotive parts with moderate branding value.

  • Legacy & Acquisitions: The company, originally Badve Engineering, acquired Escorts’ auto products division in 2016. This move strengthened its OEM and export capabilities.


Investment Overview


Belrise Industries recently announced its Initial Public Offering (IPO), which presents an exciting opportunity for prospective investors.


IPO Details


  • Issue Size: ₹2,150 crore (entirely fresh issue).

  • Price Band: ₹85 to ₹90 per share.

  • Lot Size: 166 shares.

  • Minimum Investment: ₹14,940 at the upper price band.

  • IPO Dates: Opens on May 21, 2025, and closes on May 23, 2025.

  • Listing Exchanges: NSE and BSE.

  • Book-Running Lead Managers: Axis Capital Ltd., HSBC Securities and Capital Markets (India) Pvt. Ltd., Jefferies India Pvt. Ltd., and SBI Capital Markets Ltd.

  • Registrar: Link Intime India Pvt. Ltd.

  • Use of Proceeds: Primarily for debt repayment (~₹1,618 crore), with the remainder allocated for general corporate purposes.


Financial Performance at a Glance


An examination of Belrise Industries’ financials shows promising growth prospects.


  • Revenue Growth: A 13.7% increase in FY24, bringing total revenue to ₹7,484 crore.

  • Net Profit: Reported a net profit of ₹310.9 crore in FY24, a slight decline from ₹313.7 crore in FY23.

  • EBITDA Margin: The EBITDA margin stands at 12.35% in FY24, which is a decrease of 95 basis points from the previous year.

  • Export Contribution: Exports account for approximately 23% of total revenue. Read more here.


Valuation Metrics


Understanding the valuation metrics of Belrise provides insight into its market positioning.


  • Price-to-Earnings (P/E) Ratio:

- Current: 24x.

- Adjusted (post-IPO debt reduction): Approximately 20x.


  • Market Cap-to-Revenue Ratio:

- Belrise: <1x (implied).

- Peers: Kalyani Forge at 1.25x, JBM Auto at 3x.


These metrics indicate that Belrise is undervalued compared to its peers.


Risks to Consider


Investing in Belrise involves understanding several risks.


  • Debt Levels: The company currently has total borrowings of ₹2,600 crore. Post-IPO, with the planned repayment of ₹1,618 crore, the debt is expected to decrease to approximately ₹900-1,000 crore. This should improve the debt-equity ratio and reduce interest expenses.


  • Legal Proceedings: Belrise is involved in various civil, criminal, and tax-related proceedings. Notably, the promoter has received summons under the Prevention of Money Laundering Act (PMLA) regarding transactions with Jay Polychem (India) Ltd. The matter is still pending, but the company has provided necessary documentation.


Conclusion


In conclusion, Belrise Industries represents a compelling investment opportunity for long-term investors. With over 30 years of experience, strong fundamentals, and proactive management, the company is well-positioned in the competitive automotive sector. Their strategic acquisitions and commitment to reducing debt further enhance their growth potential. While legal proceedings and past margin pressures present challenges, the overall outlook for Belrise remains positive.


Investing in Belrise could be a significant decision for those looking to capitalize on the ever-evolving landscape of the automotive industry.

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