Indo Farm Equipment Limited is gearing up for its Initial Public Offering (IPO) set to open on December 31, 2024, and close on January 2, 2025. This book-built issue seeks to raise approximately ₹260.15 crores, offering both a fresh issue and an offer for sale (OFS). Below is a detailed analysis of the Indo Farm Equipment IPO, including key details, financials, strengths, risks, and an informed investment outlook.
IPO Details at a Glance
| Parameter | Details |
|---|---|
| IPO Date | December 31, 2024 – January 2, 2025 |
| Listing Date | January 7, 2025 |
| Price Band | ₹204 – ₹215 per share |
| Lot Size | 69 shares |
| Issue Size | 1,21,00,000 shares (₹260.15 crores) |
| Fresh Issue | 86,00,000 shares (₹184.90 crores) |
| Offer for Sale (OFS) | 35,00,000 shares (₹75.25 crores) |
| Face Value | ₹10 per share |
| Listing Platforms | BSE, NSE |
| Promoters | Ranbir Singh Khadwalia, Sunita Saini |
Key Dates and Timeline
| Event | Date |
|---|---|
| IPO Open Date | December 31, 2024 |
| IPO Close Date | January 2, 2025 |
| Basis of Allotment | January 3, 2025 |
| Refund Initiation | January 6, 2025 |
| Credit of Shares | January 6, 2025 |
| Listing Date | January 7, 2025 |
Investment Breakdown
Minimum and Maximum Investments
| Category | Lots | Shares | Amount |
|---|---|---|---|
| Retail Min | 1 | 69 | ₹14,835 |
| Retail Max | 13 | 897 | ₹1,92,855 |
| S-HNI Min | 14 | 966 | ₹2,07,690 |
| B-HNI Min | 68 | 4,692 | ₹10,08,780 |
Indo Farm Equipment: A Company Overview
Indo Farm Equipment Limited, established in 1994, is a key player in the manufacturing of tractors, pick-and-carry cranes, and harvesting equipment. With a well-integrated facility in Baddi, Himachal Pradesh, the company caters to both domestic and international markets, exporting to Nepal, Bangladesh, Sudan, and other nations.
Key Highlights:
- Integrated Manufacturing: The company’s in-house production facilities reduce reliance on third-party suppliers, ensuring better quality control.
- Product Diversification: Offers a wide range of tractors (16 HP to 110 HP) and cranes (9 to 30 tons).
- Export Markets: Significant presence in developing markets with untapped potential.
- Strategic Financing Arm: Barota Finance Ltd. aids in providing retail financing solutions, supporting sales.
- Management Expertise: The leadership team combines technical proficiency with market acumen.
Financial Performance
| Period | Revenue (₹ Cr) | PAT (₹ Cr) | Assets (₹ Cr) |
|---|---|---|---|
| FY 2022 | 352.52 | 13.72 | 619.83 |
| FY 2023 | 371.82 | 15.37 | 622.84 |
| FY 2024 | 375.95 | 15.60 | 647.95 |
| Q1 FY 2025 | 75.54 | 2.45 | 644.27 |
Financial Insights:
- Consistent Revenue Growth: Revenue has shown a steady upward trend, albeit at a moderate pace.
- Profit Margins: Profit after tax (PAT) has marginally increased, reflecting stable operations.
- Low Debt Levels: With a debt/equity ratio of 0.01, the company maintains financial discipline.
- Valuation Metrics: At a price-to-book value of 2.55, the IPO appears fairly priced in line with industry standards.
Key Ratios:
- Return on Equity (ROE): 5.13%
- Return on Capital Employed (ROCE): 8.96%
Objects of the Issue
The proceeds from the fresh issue will be utilized for:
- Capacity Expansion: Establishing a new crane manufacturing unit to increase annual capacity by 3,600 units.
- Debt Repayment: Reducing outstanding financial liabilities.
- NBFC Funding: Strengthening Barota Finance Ltd. to enhance its lending capabilities.
- General Corporate Purposes: Supporting operational and administrative expenses.
SWOT Analysis
Strengths:
- Fully integrated manufacturing operations ensure cost-efficiency.
- Diverse product offerings cater to multiple customer segments.
- Low financial leverage enhances financial stability.
- Growing export footprint indicates international acceptance of products.
Weaknesses:
- Limited growth in profit margins over recent years.
- Dependence on seasonal agricultural demand for revenue.
Opportunities:
- Expansion in underpenetrated international markets.
- Increasing mechanization in Indian agriculture provides growth avenues.
- Rising demand for construction and industrial cranes.
Threats:
- Intense competition from domestic and global players.
- Macroeconomic factors affecting the agriculture and construction sectors.
Investment Outlook
Indo Farm Equipment’s IPO presents a balanced mix of opportunity and caution. While the company boasts integrated manufacturing, export growth, and robust financial discipline, the lack of significant profit growth may deter aggressive investors. However, its strategic focus on crane manufacturing and the expansion of NBFC operations position it well for long-term growth.
Recommendation: Ideal for long-term investors with a moderate risk appetite. Assess the subscription levels and market conditions before investing.
FAQs
1. What is the price band for Indo Farm Equipment IPO?
The price band is set at ₹204 to ₹215 per share.
2. What is the minimum investment required?
Retail investors need to invest a minimum of ₹14,835 for one lot (69 shares).
3. When will the shares be listed?
The shares are expected to list on January 7, 2025, on BSE and NSE.
4. Who are the IPO lead managers?
Aryaman Financial Services Limited is the lead manager for this IPO.
5. Is Indo Farm Equipment IPO good for long-term investment?
The company’s fundamentals, coupled with its plans for capacity expansion, make it suitable for long-term investment, though pricing and growth should be carefully considered.
Disclaimer
Investing in IPOs involves market risks. This article is for informational purposes only and should not be considered financial advice. Consult your financial advisor before investing.
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