Indo Farm Equipment Limited, a prominent manufacturer of tractors and agricultural machinery, is set to launch its Initial Public Offering (IPO) on December 31, 2024. The IPO, aiming to raise ₹260.15 crore, comprises a fresh issue of 0.86 crore shares totaling ₹184.80 crore and an offer for sale of 0.35 crore shares worth ₹75.25 crore. citeturn0search0
Key Details of the IPO:
- Price Band: The shares are priced between ₹204 and ₹215 per share.
- Lot Size: Investors can bid in lots of 69 shares, with a minimum investment of ₹14,835 at the upper price band.
- Subscription Period: The IPO opens on December 31, 2024, and closes on January 2, 2025.
- Anchor Investors: Bidding for anchor investors is scheduled for December 30, 2024.
- Allotment and Listing Dates: Share allotment is expected by January 3, 2025, with shares credited to demat accounts by January 6, 2025. The listing on NSE and BSE is anticipated on January 7, 2025.
Grey Market Premium (GMP):
As of December 27, 2024, the GMP for Indo Farm Equipment’s IPO stands at ₹85 per share, indicating a potential listing premium of approximately 40% over the upper price band.
Utilization of Funds:
The company plans to allocate the fresh issue proceeds as follows:
- ₹70 crore for establishing a new unit to expand pick and carry crane manufacturing capacity.
- ₹50 crore for repaying certain corporate borrowings.
- ₹45 crore for investment in its Non-Banking Financial Company (NBFC) subsidiary.
- The remaining funds for general corporate purposes.
Company Overview:
Established in 1994, Indo Farm Equipment specializes in manufacturing tractors and pick & carry cranes, along with other farm equipment like harvester combines and rotavators. Its manufacturing facility in Baddi, Himachal Pradesh, spans 127,840 square meters, with an annual production capacity of 12,000 tractors and 1,280 pick & carry cranes as of September 30, 2024.
Financial Performance:
For the fiscal year ending March 2024, the company reported:
- Revenue from operations: ₹375.23 crore, a 1.2% increase from ₹370.75 crore in the previous year.
- Net profit: ₹15.59 crore, up from ₹15.37 crore year-on-year.
Risks and Considerations:
Potential investors should be aware of:
- The company’s reliance on the agricultural sector, which is susceptible to monsoon variability and government policies.
- Competition from established players in the agricultural machinery market.
- Exposure to fluctuations in raw material prices and supply chain disruptions.
Conclusion:
Indo Farm Equipment’s IPO presents an opportunity to invest in a company with a solid presence in the agricultural machinery sector. The positive GMP suggests favorable market sentiment. However, investors should conduct thorough due diligence, considering the associated risks and the company’s financial health, before making investment decisions.
Indo Farm Equipment IPO Full Review
