The highly anticipated initial public offering (IPO) of Indo Farm Equipment Ltd, a leading tractor and engineering solutions provider, opened for subscription today, December 31, and will close on January 2. With a price band of ₹204 to ₹215 per share, the IPO has already garnered significant interest from investors across categories.
Key Highlights of Indo Farm Equipment IPO
IPO Objectives
The net proceeds from the IPO will be utilized for:
- Expanding Manufacturing Capacity: Setting up a new unit to enhance the production of pick-and-carry cranes (₹70 crore).
- Debt Reduction: Repayment or pre-payment of borrowings (₹50 crore).
- Investment in Subsidiary: Infusion of funds into NBFC subsidiary Barota Finance Ltd. to strengthen its capital base (₹45 crore).
- General Corporate Purposes: Supporting overall business growth and operations.
Subscription Status
By 11:00 AM on Day 1, the IPO was subscribed 3.73 times, with strong demand from retail and non-institutional investors (NII):
- Retail Investors: Subscribed 5.68 times
- Non-Institutional Investors (NII): Subscribed 4.12 times
- Qualified Institutional Buyers (QIB): Yet to place bids
The IPO was fully subscribed within minutes of opening, showcasing its popularity and strong investor confidence.
Grey Market Premium (GMP)
The grey market premium (GMP) for Indo Farm Equipment shares is ₹80 per share, indicating a 37% premium over the upper price band of ₹215. This suggests robust interest and potential upside in the secondary market.
Anchor Investors
Prior to the IPO, Indo Farm Equipment raised ₹78 crore from anchor investors. Notable entities include:
- Negen Undiscovered Value Fund
- Niveshaay Hedgehogs
- India Equity Fund I
- Saint Capital Fund
The company allotted 36.30 lakh shares to these investors at ₹215 per share, the upper end of the price band.
Financial Snapshot
Indo Farm Equipment has demonstrated consistent growth, as highlighted by its financials:
| Particulars | FY22 | FY23 | FY24 | Q1 FY25 |
|---|---|---|---|---|
| Revenue (₹ crore) | 408.75 | 515.20 | 617.80 | 155.30 |
| Net Profit (₹ crore) | 38.90 | 52.15 | 68.45 | 21.50 |
The company is positioned as a prominent player in the agricultural and industrial equipment space, with a focus on innovation and expansion.
Analysts’ Recommendations
According to Canara Bank Securities, the IPO is priced at a P/E ratio of 51.81x, which is higher than the industry average of 43.82x. While the valuation appears steep, the firm recommends subscribing for the long term, citing growth potential and market positioning.
IPO Details at a Glance
- IPO Price Band: ₹204-₹215 per share
- Issue Size: ₹260.15 crore
- Fresh Issue: ₹184.90 crore (86 lakh equity shares)
- Offer for Sale (OFS): ₹75.25 crore (35 lakh equity shares)
- IPO Registrar: Mas Services
- Lead Managers: Aryaman Financial Services
The Indo Farm Equipment IPO has kicked off with a strong response from investors, driven by robust financial performance and growth potential in the manufacturing sector. With high subscription rates and a promising GMP, the IPO is set to attract more interest before it closes on January 2. Investors with a long-term horizon may find this offering a compelling opportunity.
Stay tuned for further updates on the Indo Farm Equipment IPO.
