Indo Farm Equipment Limited, a prominent manufacturer of tractors and pick-and-carry cranes, recently concluded its Initial Public Offering (IPO) with significant investor interest. This article provides a comprehensive overview of the IPO, including key highlights, subscription details, financial performance, and market buzz.
Company Overview
Established in 1994, Indo Farm Equipment Limited has over two decades of experience in manufacturing agricultural and construction equipment. The company operates under two brands, Indo Farm and Indo Power, and exports its products to various countries, including Nepal, Syria, Sudan, Bangladesh, and Myanmar. Their product range includes tractors ranging from 16 HP to 110 HP and pick-and-carry cranes with capacities from 9 to 30 tons.
IPO Details
- Issue Size: The IPO aimed to raise ₹260.15 crore, comprising a fresh issue of 86 lakh equity shares worth ₹184.90 crore and an offer for sale (OFS) of 35 lakh shares amounting to ₹75.25 crore.
- Price Band: The shares were offered at a price band of ₹204 to ₹215 per equity share.
- Lot Size: Investors could bid for a minimum of 69 shares, requiring a minimum investment of ₹14,835 for retail investors.
- Subscription Period: The IPO was open for subscription from December 31, 2024, to January 2, 2025.
- Listing Date: The shares are scheduled to be listed on the BSE and NSE on January 7, 2025.
Subscription Details
The IPO received an overwhelming response from investors, with an overall subscription of 229.68 times. The breakdown is as follows:
- Qualified Institutional Buyers (QIBs): Subscribed 242.40 times.
- Non-Institutional Investors (NIIs): Subscribed 503.83 times.
- Retail Individual Investors (RIIs): Subscribed 104.92 times.
Financial Performance
For the financial year ending March 31, 2024, Indo Farm Equipment reported:
- Revenue: ₹375.95 crore, a 1% increase from ₹371.82 crore in the previous year.
- Profit After Tax (PAT): ₹15.60 crore, up from ₹15.37 crore in the previous year.
- Total Assets: ₹647.95 crore.
- Net Worth: ₹317.06 crore.
- Total Borrowings: ₹270.54 crore.
Grey Market Premium (GMP)
The grey market premium for Indo Farm Equipment’s shares has been fluctuating, indicating strong investor interest. As of January 3, 2025, the GMP was around ₹96, suggesting a potential listing price of approximately ₹311 per share, which is about 44.65% above the upper end of the IPO price band.
Use of IPO Proceeds
The company plans to utilize the net proceeds from the fresh issue for the following purposes:
- Expansion of Manufacturing Capacity: Setting up a new dedicated unit to expand their pick-and-carry cranes manufacturing capacity.
- Debt Repayment: Repayment or pre-payment, in full or part, of certain borrowings availed by the company.
- Investment in NBFC Subsidiary: Further investment in their NBFC subsidiary, Barota Finance Ltd., to augment its capital base for future requirements.
Market Buzz and Analyst Opinions
The substantial oversubscription across all investor categories reflects strong confidence in Indo Farm Equipment’s business model and growth prospects. Analysts have noted the company’s fully integrated manufacturing setup, experienced management team, and diversified product range as key strengths. However, some caution that the company’s valuations appear higher compared to peers, suggesting that investors should consider long-term prospects and inherent risks.
Allotment Status and Listing
The basis of allotment was finalized on January 3, 2025. Investors can check their allotment status on the official websites of BSE, NSE, or Mas Services, the registrar for the issue. The shares are expected to be credited to the demat accounts of successful bidders by January 6, 2025, with the listing on stock exchanges scheduled for January 7, 2025.
Conclusion
Indo Farm Equipment’s IPO has garnered significant attention, underscored by robust subscription numbers and a healthy grey market premium. The company’s strategic plans for capacity expansion, debt reduction, and investment in its NBFC subsidiary indicate a forward-looking approach to growth. As the listing date approaches, investors and market watchers will keenly observe the stock’s performance, which could set the tone for upcoming IPOs in the sector.
Disclaimer: This article is for informational purposes only and should not be construed as financial advice. Investors are advised to conduct their own research or consult with a financial advisor before making investment decisions.
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