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Indo Farm Equipment IPO: Allotment Finalised, Listing Tomorrow; GMP how to check allotment status
Team Finance Saathi
06/Jan/2025
What's covered under the Article:
- Overview of Indo Farm Equipment Ltd. and its manufacturing capabilities.
- Detailed subscription statistics, GMP insights, and potential listing gains.
- In-depth financial analysis to help investors evaluate IPO valuation.
Indo Farm Equipment Ltd. IPO presents an opportunity for investors to consider a company with expertise in crane and tractor manufacturing. Since its inception in 2000, the company has established itself as a leading manufacturer of high-quality agriculture tractors, cranes, and agricultural implements, in collaboration with Ursus (Poland).
The Indo Farm Equipment IPO is a Book Built Issue offering ₹260.15 Crores, including a Fresh Issue of 86.00 Lakh shares (worth ₹184.9 Crores) and an Offer for Sale of 35.00 Lakh shares (worth ₹75.25 Crores). The price band is set at ₹204 to ₹215 per share, and the market capitalization at the upper price band of ₹215 per share is ₹977.55 Crores.
The subscription period for this IPO starts on December 31, 2024, and ends on January 2, 2025, with the allotment date expected on January 3, 2025. Shares will be listed on BSE and NSE on January 7, 2025. The lot size is 69 shares, with a minimum investment requirement of ₹14,835 for retail investors and ₹2,07,690 for High-Net-Worth Individuals (HNIs) who must apply for 14 lots.
IPO Subscription and Allotment Information:
- The IPO has witnessed overwhelming investor interest, with a subscription rate of 229.68 times as of January 2, 2025. You can check the live subscription status on the BSE website.
- Anchor Investors have raised ₹78.04 Crores, with 36,30,000 equity shares allocated at ₹215 per share. This reflects institutional backing, providing additional confidence in the IPO’s market potential.
Financial Performance Overview:
- Revenue for the fiscal year 2024 was ₹3,759.53 Million, with EBITDA of ₹625.16 Million, indicating strong operational efficiency. Profit After Tax (PAT) for the fiscal year stood at ₹155.95 Million.
- The pre-issue EPS is ₹4.15, and post-issue EPS is ₹3.43. The pre-issue P/E ratio is 51.81x, while the post-issue P/E ratio is 62.68x, higher than the industry average of 42x, suggesting that the IPO is fully priced.
- The ROCE (Return on Capital Employed) for FY24 is 8.96%, and the ROE (Return on Equity) is 5.13%, which suggests that the company is generating moderate returns on its investments.
Objectives of the IPO: The funds raised through this IPO will be used for:
- Setting up a new dedicated unit for expanding the manufacturing capacity of Pick & Carry Cranes (₹711.31 Million).
- Repayment or pre-payment of borrowings (₹500.00 Million).
- Investment in the NBFC subsidiary (Barota Finance Ltd.) to strengthen its capital base (₹450.00 Million).
- General corporate purposes.
Indo Farm Equipment IPO Review: Indo Farm Equipment Ltd. has a strong track record in manufacturing agricultural machinery, and the company’s financial performance has shown steady growth. However, the IPO’s higher valuation (P/E ratio of 62.68x) suggests that it may be priced for short-term gains rather than long-term investment at this time. The Grey Market Premium (GMP) of ₹65, signaling 30.23% potential listing gains, makes this IPO appealing to risk-tolerant investors seeking short-term profit from listing day.
Investment Considerations: Given the strong demand indicated by the IPO subscription, anchor investment support, and positive GMP, the Indo Farm Equipment IPO holds potential for listing gains. However, the P/E ratios higher than the industry’s average suggest that long-term investors should carefully evaluate the stock’s future performance, especially since the financial metrics indicate moderate returns in comparison to other IPOs.