
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
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:
- 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.
- 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.
- Experienced Management: The company benefits from experienced promoters and leadership, which have effectively steered its growth over the years.
- 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