Indo Farm Equipment IPO: IPO Details, GMP, Bidding period, allotment time, listing date and more

The ₹260.15 crore IPO of Indo Farm Equipment Ltd. opens for bidding today, December 31, 2024, with the price band set at ₹204-215 per share. Investors can bid for a minimum lot size of 69 equity shares. The IPO will close on January 2, 2025.

Anchor Investors

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Ahead of the IPO, the company raised ₹78.04 crore from 11 institutional investors through its anchor book. Key investors include:

  • Negen Undiscovered Value Fund: ₹15 crore
  • Niveshaay Hedgehogs Fund and Rajasthan Global Securities: ₹10 crore each
  • Other notable investors include Subham Capital, India Equity Fund, and Shine Star Build Cap, among others.

IPO Details

  • Fresh Issue: ₹185 crore
  • Offer for Sale (OFS): 35 lakh shares (₹75 crore)
  • Use of Proceeds:
    • ₹50 crore for debt repayment
    • ₹45 crore for investment in NBFC subsidiary Barota Finance
    • Remaining for general corporate purposes

The company undertook a pre-IPO placement of 19 lakh shares at ₹185/share, raising ₹35.1 crore, reducing the fresh issue size from 1.05 crore to 86 lakh equity shares.

Bajaj Broking’s Recommendation

According to Bajaj Broking, the Indo Farm Equipment IPO presents a promising opportunity for long-term investors due to the company’s strong fundamentals, capacity expansion plans, and growth-oriented strategies. They recommend subscribing for the following reasons:

  1. Strong Market Position: Indo Farm Equipment is a fully integrated manufacturer of tractors and pick-and-carry cranes, supported by its robust presence in the domestic and export markets.
  2. Growth-Oriented Utilization of Proceeds: Proceeds from the IPO will be utilized for debt repayment, investments in the NBFC subsidiary, and capacity expansion, which are expected to strengthen the company’s financial position and operational capabilities.
  3. Experienced Management: The company benefits from experienced promoters and leadership, which have effectively steered its growth over the years.
  4. Valuation Perspective: At the upper price band, the issue is valued at a Price-to-Earnings (P/E) ratio of 65x on FY24 earnings, which is considered reasonable given its market potential.

Valuation and Grey Market Premium

At the upper price band of ₹215, Indo Farm Equipment seeks a market cap of ₹1,033 crore. The PE ratio stands at 65x, considered fully priced. The current grey market premium (GMP) is ₹80, suggesting a potential listing price of ₹295 (37% premium).

IPO Reservation

  • QIBs: 50%
  • NIIs: 15%
  • Retail: 35%

Company Overview

Founded in 1994, Indo Farm Equipment is a leading manufacturer of tractors, pick-and-carry cranes, and other farm equipment. The company exports its products globally. In FY24, it reported revenue of ₹375 crore and a profit after tax of ₹15.5 crore.

IPO Timeline

  • Bidding Period: December 31, 2024 – January 2, 2025
  • Allotment Finalization: January 3, 2025
  • Listing Date: January 7, 2025