On Friday, January 3, Indo Farm Equipment shares debuted flat at ₹256 on NSE, a 19% premium to the issue price of ₹215. On BSE, it listed at ₹258.40, up 20.19% from the IPO price.
Indo Farm Equipment’s ₹260.15 crore IPO was open for subscription from December 31 to January 2. The Indo Farm Equipment IPO price ranged between ₹204-215 per equity share.
Following three days of bidding, the Indo Farm Equipment IPO ended with exceptional demand, receiving 227.67 times bids. The IPO got bids for 192.83 crore shares, with 84.70 lakh shares on offer. The retail investor segment was booked 101.79 times, while non-institutional investors (NII) were subscribed 501.75 times. Meanwhile, the Qualified Institutional Buyers quota was bid 242.4 times during the three days of bidding.
About the IPO
Indo Farm Equipment’s IPO consisted of a fresh offering of 0.86 crore shares worth ₹184.90 crore and an offer to sell 0.35 crore shares for ₹75.25 crore. Following the IPO, promoter shares in the company will fall to 69.44%, down from 93.45% before the offering. Retail investors can apply with a lot size of 69 shares and a minimum investment of ₹14,835.
The Indo Farm Equipment IPO received ₹78.05 crore from anchor investors ahead of its December 30, 2024 IPO.
The primary goals of the net fresh issue are to raise funds to establish a dedicated unit to increase the manufacturing capacity of pick-and-carry cranes, repay or prepay specific borrowings, either fully or partially, and strengthen the capital base of the company’s NBFC subsidiary, Barota Finance Ltd., through additional investments. A portion of the proceeds will also be used for general business reasons.
Aryaman Financial Services Limited is the book-running lead manager for the Indo Farm Equipment IPO, while Mas Services Limited is the registrar.
Review
Most brokerages have recommended investing in the Indo Farm Equipment IPO, citing long-term development potential despite some worries about prices.
SBI Securities
SBI Securities recommends that investors subscribe to the issue at the cut-off price for long-term investment. The brokerage acknowledged weaker CAGR growth between FY22-24, with revenue, EBITDA, and PAT increasing by 3.2%, 9.5%, and 6.6%, respectively. Analysts noted a strong 45 per cent CAGR in pick-and-carry crane sales over the last three years, with the plant nearing full capacity.
Anand Rathi
Anand Rathi also gave the company a ‘Subscribe’ grade, noting its historic business value, skilled promoters, targeted capacity expansion, debt payback plans, and efforts to strengthen its financial arm. The brokerage stated that at the upper price band of ₹215, the IPO indicates a market capitalization of ₹1,033.1 crore and an EV/EBITDA of 17, excluding the impact of interest expenses. Based on FY24 profits, the company is valued at a PE ratio of 65x, which the brokerage considers fully priced.
About the Company
Indo Farm Equipment, situated in Chandigarh, was founded in 1994 and specializes in the manufacture of tractors, pick-and-carry cranes, and harvesting equipment. The company works under two brands, Indo Farm and Indo Power, and exports to Nepal, Syria, Sudan, Bangladesh, and Myanmar. Indo Farm Equipment manufactures tractors with horsepower ratings ranging from 16 to 110, as well as pick-and-carry cranes with capacities ranging from 9 to 30 tons. Its Baddi factory in Himachal Pradesh spans 127,840 square meters and comprises a foundry, machine shop, and assembly units. It has an annual manufacturing capacity of 12,000 tractors and 1,280 pick-and-carry cranes.
For the fiscal year ending March 31, 2024, the company reported a 1% increase in sales and a 1% increase in profit after tax (PAT) over the previous fiscal year.
