The Indo Farm Equipment Limited IPO has made a strong debut on the Bombay Stock Exchange (BSE), trading with a 20% premium on its listing day. The company, a prominent crane and tractor manufacturer based in Baddi, Himachal Pradesh, raised a significant ₹260.15 Crores through its Book Built Issue. The subscription period for the IPO opened on December 31, 2024, and closed on January 2, 2025, with allotment details finalized on January 3, 2025. The listing took place on January 7, 2025, with shares priced in the range of ₹204 to ₹215 each. At the upper end of the price band, the company’s market capitalization stands at ₹977.55 Crores.

IPO Overview and Details

Indo Farm Equipment’s IPO price band was set at ₹204 to ₹215 per equity share. The issue consisted of an 86 lakh fresh issue worth ₹184.9 Crores and a 35 lakh offer for sale (OFS) worth ₹75.25 Crores. The company aims to raise funds to expand its crane manufacturing capacity and repay existing borrowings, among other objectives.

The Grey Market Premium (GMP) for Indo Farm Equipment’s IPO was recorded at ₹65, reflecting an expected 30.23% premium. This reflects the strong demand for the company’s shares ahead of the listing, and many investors hoped to benefit from listing gains. At the ₹215 price per share, the expected listing price was anticipated to reach ₹280.

Performance and Subscription Details

The IPO received a tremendous response from investors, with the subscription status showing a massive 229.68 times oversubscription by the final day of the offer. This reflects the strong interest in Indo Farm Equipment’s growth prospects, especially in the agricultural and construction sectors. The anchor investors played a crucial role, with ₹78.04 Crores raised from them at the IPO price of ₹215 per share.

Indo Farm Equipment’s financial performance over the past few years shows steady growth. For the fiscal year ending June 30, 2024, the company reported revenues of ₹755.38 million, reflecting a year-on-year increase. Similarly, its EBITDA and profit after tax (PAT) figures have seen improvements, indicating the company’s ability to maintain profitability despite industry challenges.

IPO Proceeds and Utilization

The proceeds from the IPO are intended to be utilized for several key objectives:

1. ₹711.31 million for setting up a new dedicated unit to expand the manufacturing capacity of Pick & Carry Cranes.
2. ₹500 million will be used to repay or prepay part of the company’s borrowings.
3. ₹450 million will be invested in Barota Finance Ltd., the company’s NBFC subsidiary, to strengthen its capital base.
4. A portion of the proceeds will also be used for general corporate purposes.

These investments will help Indo Farm scale its operations and position itself as a dominant player in the manufacturing of agricultural machinery and cranes. The company's global reach and technical collaborations, such as with Ursus (Poland), have bolstered its presence in the international market.

Company Overview

Indo Farm Equipment was established in 2000, and since its inception, it has been at the forefront of manufacturing world-class tractors, cranes, and other agricultural implements. The company is known for its robust manufacturing capabilities and cutting-edge technology, making it a key player in the industry. Sunita Saini and Ranbir Singh Khadwalia, the promoters of Indo Farm, have extensive experience in the agricultural equipment sector, with a history in Eicher Farm Machinery Limited.

Stock Market Performance and Future Outlook

Following the successful listing of its shares, Indo Farm Equipment’s stock has surged by 20%, reflecting the strong investor confidence in its future prospects. The company’s IPO P/E ratio stands at 51.81x (pre-issue) and 62.68x (post-issue), higher than the industry average of 42x. While these metrics suggest a relatively expensive valuation, the strong demand for the IPO points to optimism about its growth trajectory.

Investors who secured shares in the IPO may expect to see further gains as the stock adjusts to market conditions. The company's plans for expanding its manufacturing capacities and further investing in its subsidiary are expected to fuel future growth and profitability.

Conclusion

Indo Farm Equipment's IPO has been met with enthusiastic demand from investors, leading to a strong listing performance on the BSE with a 20% premium. The company is poised to capitalize on its expanding production capacities and strategic investments, making it a key player in the agricultural machinery and crane manufacturing industry.

The Upcoming IPOs in this week and coming weeks are Sat Kartar Shopping,Barflex Polyfilms.

The Current active IPO are   Indobell Insulation, Standard Glass Lining, Quadrant Future, Capital Infra Trust, Delta Autocorp, Avax Apparels, B R Goyal, Fabtech Technologies.

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