Indo Farm Equipment Limited, a leading manufacturer of tractors and cranes, is set to open its Initial Public Offering (IPO) for subscription on December 31, 2024. Known for its robust product portfolio and two decades of operational excellence, this IPO has garnered significant attention in the investment community. Let’s dive into the critical aspects of the IPO.
Key Highlights of Indo Farm Equipment IPO
- IPO Timeline:
- Opening Date: December 31, 2024
- Closing Date: January 2, 2025
- Listing Date: January 7, 2025
- Price Band and Lot Size:
- Price Band: ₹204 to ₹215 per equity share
- Lot Size: 69 shares and multiples thereof
- IPO Structure:
- Fresh Issue: 8.6 million equity shares
- Offer for Sale (OFS): 3.5 million equity shares by promoter Ranbir Singh Khadwalia
- Objective of the IPO:
- Expand production capacity for Pick & Carry Cranes (₹70 crore)
- Repay existing loans (₹50 crore)
- Bolster investment in its NBFC subsidiary, Barota Finance (₹45 crore)
- General corporate purposes
- Grey Market Premium (GMP):
The IPO is witnessing strong demand in the grey market, with a current premium of ₹82, implying a listing price of approximately ₹305—a 41.86% gain over the issue price. - Profitability Track Record:
Indo Farm Equipment boasts a consistent profit track record:- 2024: ₹155.95 million
- 2023: ₹153.72 million
- 2022: ₹137.19 million
- Anchor Investors:
Allocation to anchor investors will occur on December 30, 2024, a day before the public issue opens. - Share Allocation Details:
- QIBs: 50% reserved
- NIIs: 15% reserved
- Retail Investors: 35% reserved
- Comparison with Peers:
- Escorts Kubota Ltd: P/E ratio of 36.79
- Action Construction Equipment Ltd: P/E ratio of 47.42
- Lead Managers and Registrars:
- Lead Manager: Aryaman Financial Services Ltd
- Registrar: Mas Services Ltd
Indo Farm Equipment: A Brief Overview
Established over two decades ago, Indo Farm Equipment has cemented its reputation in the manufacturing of agricultural equipment, including tractors, cranes, and harvester combines. The company operates state-of-the-art facilities equipped with advanced technologies such as induction furnaces, automatic molding lines, and sand testing laboratories.
The company’s diversified product portfolio and consistent financial growth make it a strong contender in the agricultural equipment market.
Should You Subscribe?
Why Consider Investing?
- Strong Market Presence: The company’s two-decade history and profitability make it a reliable choice.
- Growth Potential: Investment in capacity expansion and subsidiaries indicates strategic growth plans.
- Attractive GMP: With a grey market premium of ₹82, the IPO is poised for a robust listing gain.
Risks to Consider:
- Market Volatility: Global economic uncertainties could impact stock performance post-listing.
- Reliance on Specific Products: Cranes and tractors contribute significantly to revenue, limiting diversification.
GMP Trends
The IPO’s GMP has ranged from ₹0 to ₹90 in recent trading sessions, signaling increasing investor confidence. While grey market trends are not definitive indicators, they often reflect broader market sentiment.
Key IPO Details
| Particulars | Details |
|---|---|
| IPO Opening Date | December 31, 2024 |
| IPO Closing Date | January 2, 2025 |
| Price Band | ₹204 to ₹215 |
| Lot Size | 69 shares |
| Grey Market Premium (GMP) | ₹82 |
| Estimated Listing Price | ₹305 |
| Lead Manager | Aryaman Financial Services Ltd |
| Registrar | Mas Services Ltd |
Conclusion
Indo Farm Equipment’s IPO offers a promising opportunity for investors seeking exposure to the agricultural and industrial equipment sector. With robust financials, strategic growth plans, and a favorable GMP, the IPO is generating significant buzz. However, investors should weigh the potential risks and market conditions before subscribing.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always consult a financial advisor before making investment decisions.
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