The Carraro India IPO 2024 is an exciting investment opportunity for those interested in India's thriving automotive and manufacturing sectors. Carraro India is a prominent independent Tier 1 solution provider for axles, transmission systems, and gears, catering mainly to the agricultural and construction vehicle industries in India. The company has a strong technological base, offering a comprehensive range of services, including in-house product design and manufacturing.

This IPO is part of a book-built issue, with the total issue size amounting to ₹1,250 Crores. The issue consists entirely of an offer for sale (OFS) of 177.55 Lakh shares. The subscription period for the Carraro India IPO began on December 20, 2024, and will close on December 24, 2024. Investors interested in this IPO can apply at a price band of ₹668 to ₹704 per equity share, which places the market capitalization of Carraro India at ₹4,002.34 Crores at the upper price band of ₹704. The lot size for the IPO is 21 shares, with a minimum investment for retail investors standing at ₹14,784. High-Net-Worth Individuals (HNIs) need to invest in a minimum of 14 lots, amounting to ₹2,06,976.

IPO Subscription and GMP Trends

As of December 24, 2024, the IPO has been subscribed 0.28 times, reflecting growing investor interest, though still low on the final day of subscription. The Grey Market Premium (GMP) is pegged at ₹76, indicating a potential listing gain of approximately 10.84% based on the price band. However, as GMP is driven by demand and supply in the unorganized market, it should be viewed cautiously, as no real price discovery happens before the listing on the BSE and NSE.

The IPO allotment date is scheduled for December 26, 2024, and investors can check their allotment status on the registrar's website after that date. Carraro India has also raised a significant sum of ₹375 Crores from Anchor Investors, who have been allotted 53,26,703 equity shares at the upper price band of ₹704 per share.

Financial Performance and Key Metrics

Carraro India has shown steady growth in its financial performance, with revenues from operations of ₹9,227.39 Million for the period ending September 30, 2024. The company’s EBITDA for FY24 stood at ₹1,010.96 Million, demonstrating strong profitability. Despite a relatively high Price-to-Earnings (P/E) ratio of 64x, the company’s return on equity (ROE) is 17.69% for FY24, signaling potential for sustained growth. However, the P/E ratio is higher than the industry average of 32x, suggesting that the IPO is fully priced.

Key Takeaways and Recommendations

1. The Carraro India IPO is expected to generate interest from investors due to its strong financials and steady growth in a promising sector.
2. Anchor Investors have shown confidence by investing ₹375 Crores at ₹704 per share, which signals trust in the company’s long-term prospects.
3. The Grey Market Premium suggests some potential for gains on listing, but the high P/E ratio may indicate that the IPO is priced at a premium, making it less attractive for those seeking quick gains.

While the IPO has received strong support from institutional investors, it is important for retail investors to carefully assess the valuation and long-term potential. If you are considering investing, it is recommended to evaluate the current market conditions and your risk tolerance before applying.

The Upcoming IPOs in this week and coming weeks are Anya Polytech, Citichem India, Solar91 Cleantech, Rosmerta Digital, Indo Farm, and Avanse Financial. The Current active IPO is Unimech Aerospace, Ventive Hospitality, Senores Pharmaceuticals, Carraro India.
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