Indo Farm Equipment mobilises ₹78 crore from anchor investors for ₹260-crore IPO ahead of subscription

Indo Farm Equipment IPO: Indo Farm Equipment Limited mobilised ₹78 crore from anchor investors head of its IPO subscription opening for bidding. The mainboard initial public offering (IPO) of the truck and crane manufacturer will open for its three-day subscription period for all D-Street investor groups on Tuesday, December 31, and closes on Thursday, January 2, 2025.

According to a BSE circular on Monday, Indo Farm Equipment allotted 36.30 lakh shares to 11 entities at ₹215 per equity share, which is also the upper end of the price band. This aggregates the transaction size to ₹78.04 crore. Negen Undiscovered Value Fund, Niveshaay Hedgehogs, Rajasthan Global Securities, Subham Capital, India Equity Fund I, Saint Capital Fund and Vikasa India EIF I Fund - Share Class P, among others, were the anchor investors.

Also Read: Indo Farm Equipment IPO opens on December 31: GMP, issue details, 10 key things to know before subscribing to the issue

Indo Farm Equipment IPO Details

The ₹260-crore IPO comprises a fresh issue of 86 lakh equity shares and an offer for sale (OFS) of 35 lakh equity shares by promoter selling shareholder Ranbir Singh Khadwalia. The issue has a price band of ₹204-215 per share of face value of ₹10. At the upper end of the price band, the IPO size has been pegged at ₹260 crore, placing the company's market capitalisation at over ₹1,000 crore. 

The issue's lot size is 69 equity shares and in multiples of 69 equity shares thereafter. Ranbir Singh Khadwalia and Sunita Saini are the promoters of the company. The allocation of shares in the Indo Farm Equipment IPO is set to be determined on Friday, January 3. 

The company plans to begin processing refunds on Monday, January 6, and shares will be credited to the demat accounts of allottees on the same day following the refunds. The shares of Indo Farm Equipment are expected to officially list on the BSE and NSE on Tuesday, January 7.

Also Read: Indo Farm Equipment IPO opens tomorrow: GMP, price band, issue size among 10 key things to know

The company has reserved not more than 50 per cent of the shares in the public issue for qualified institutional buyers (QIB), not less than 15 per cent for non-institutional institutional investors (NII), and not less than 35 per cent of the offer is reserved for retail investors. Aryaman Financial Services Ltd is the book running lead manager for the IPO, whereas Mas Services Ltd is the registrar for the issue.

The company intends to use the net proceeds from the IPO to establish a dedicated facility designed to enhance the production capacity of Pick & Carry Cranes ( ₹70 crore), to repay or settle a portion or all of specific loans acquired by the company ( ₹50 crore), to increase investment in its NBFC subsidiary (Barota Finance) to bolster its capital base for upcoming requirements ( ₹45 crore), and to allocate the remaining funds for general corporate purposes.
 

Indo Farm Equipment Company Details

Indo Farm Equipment is a well-established manufacturer of Tractors and Pick & Carry Cranes with over two decades of experience. The company also sells various agricultural equipment, including Harvester Combines, Rotavators, and other related spare parts and components, which collectively have minimal impact on the overall revenue of the business.

Also Read: Indo Farm Equipment IPO: From key dates to risks — here are 10 things to know from RHP

The company’s facilities feature induction furnaces, pneumatic molding machines, an automatic molding line, a sand plant, a fully equipped metallurgy and sand testing laboratory, as well as machining, gear, press, fabrication, paint, assembly, quality, and utility rooms.

As per red herring prospectus (RHP), the company's listed peers are Escorts Kubota Ltd (with a P/E of 36.79), and Action Construction Equipment Ltd (with a P/E of 47.42). The company has established itself as a profit-generating entity with a consistent record spanning over twenty years. 

For the periods ending June 30, 2024, and the financial years ending March 31 for 2024, 2023, and 2022, the firm reported a total income of ₹755.38 million, ₹3,759.53 million, ₹3,718.18 million, and ₹3,525.21 million, respectively. Its profit after tax for these periods amounted to ₹24.54 million, ₹155.95 million, ₹153.72 million, and ₹137.19 million, respectively.