Indo Farm Equipment IPO – Professional Summary
Indo Farm Equipment Limited is set to launch its initial public offering (IPO) as a book-built issue, offering a total size of ₹260.15 crores. The offering includes a fresh issue of ₹184.90 crores (0.86 crore shares) and an offer for sale of ₹75.25 crores (0.35 crore shares). The IPO will open on December 31, 2024, and close on January 2, 2025, with the final allotment expected by January 3, 2025. The listing on the BSE and NSE is tentatively scheduled for January 7, 2025.
The price band for the IPO is set at ₹204 to ₹215 per share, with a minimum lot size of 69 shares. Retail investors can apply for a minimum of 69 shares (₹14,835), with the option to bid for up to 13 lots (897 shares, ₹1,92,855). Non-Institutional Investors (NIIs) and Qualified Institutional Buyers (QIBs) have distinct reservation portions, with 35% allocated to retail investors, 15% to NIIs, and 50% to QIBs.
Company Overview
Incorporated in 1994, Indo Farm Equipment Limited manufactures tractors, pick & carry cranes, and other agricultural equipment under the brands Indo Farm and Indo Power. The company has a production capacity of 12,000 tractors and 1,280 pick & carry cranes annually from its facility in Baddi, Himachal Pradesh. With expanding operations, the company is set to increase its pick & carry crane production capacity to 3,600 additional units per year.
Indo Farm Equipment also has an in-house NBFC subsidiary, Barota Finance Ltd., enhancing its financial service offerings to customers.
Indo Farm Equipment IPO Details
Indo Farm Equipment Limited is launching its Initial Public Offering (IPO) to raise a total of ₹260.15 crore. The issue is a combination of a fresh issue and an offer for sale, and it will be listed on the BSE and NSE.
Key IPO Information:
- IPO Open Date: December 31, 2024
- IPO Close Date: January 2, 2025
- Listing Date: January 7, 2025 (tentative)
- Face Value: ₹10 per share
- Price Band: ₹204 to ₹215 per share
- Lot Size: 69 shares (minimum application)
- Total Issue Size: 1,21,00,000 shares (aggregating up to ₹260.15 crore)
- Fresh Issue: 86,00,000 shares (aggregating up to ₹184.90 crore)
- Offer for Sale: 35,00,000 shares (aggregating up to ₹75.25 crore)
Shareholding Structure:
- Pre-Issue Shareholding: 3,94,51,600 shares
- Post-Issue Shareholding: 4,80,51,600 shares
Issue Type:
- Book Built Issue IPO
Listing:
- The company will list its shares on the BSE and NSE.
This IPO marks a significant milestone for Indo Farm Equipment as it offers both a fresh issue and an offer for sale, with a focus on raising funds for expansion and other corporate purposes.
Indo Farm Equipment IPO Timeline (Tentative Schedule)
The following is the tentative schedule for the Indo Farm Equipment IPO:
- IPO Open Date: Tuesday, December 31, 2024
- IPO Close Date: Thursday, January 2, 2025
- Cut-off Time for UPI Mandate Confirmation: 5 PM on January 2, 2025
- Basis of Allotment: Friday, January 3, 2025
- Initiation of Refunds: Monday, January 6, 2025
- Credit of Shares to Demat: Monday, January 6, 2025
- Listing Date: Tuesday, January 7, 2025
This schedule outlines the important milestones for the IPO, including the opening and closing dates, as well as the key dates for allotment, refunds, and listing.
Indo Farm Equipment IPO Lot Size and Investment Details
The minimum and maximum investments for retail investors and HNI (High Net-worth Individual) investors are outlined below based on the lot size of 69 shares. Each lot is priced between ₹204 and ₹215 per share.
Lot Size and Investment Details:
| Category | Lots | Shares | Amount (₹) |
|---|---|---|---|
| Retail (Min) | 1 | 69 | ₹14,835 |
| Retail (Max) | 13 | 897 | ₹1,92,855 |
| S-HNI (Min) | 14 | 966 | ₹2,07,690 |
| S-HNI (Max) | 67 | 4,623 | ₹9,93,945 |
| B-HNI (Min) | 68 | 4,692 | ₹10,08,780 |
Key Points:
- Retail investors can bid for a minimum of 69 shares, which amounts to ₹14,835 (based on the price band).
- The maximum lot size for retail investors is 13 lots (897 shares), totaling ₹1,92,855.
- For Small HNIs (S-HNI), the minimum investment starts at 14 lots (966 shares) for ₹2,07,690, with a maximum of 67 lots (4,623 shares) for ₹9,93,945.
- Big HNIs (B-HNI) need to apply for a minimum of 68 lots (4,692 shares), totaling ₹10,08,780.
This structure allows investors to apply in multiples of 69 shares, with increasing investments based on the category and lot size.
Financial Overview
For the year ending March 31, 2024, the company reported a revenue of ₹375.95 crores and a profit after tax (PAT) of ₹15.6 crores. The financials for the first quarter of FY2024-25 (June 30, 2024) show a slight increase in revenue and PAT. The company’s debt-equity ratio remains low at 0.01, indicating stable financial leverage.
Indo Farm Equipment Limited: Financial Overview
Indo Farm Equipment Limited has shown a steady performance over recent financial years, with moderate growth in its revenue and profit after tax (PAT). Below is a detailed breakdown of the company’s financials from FY 2023-2024 and FY 2022-2023:
Financial Summary:
| Particulars | 30 Jun 2024 | 31 Mar 2024 | 31 Mar 2023 | 31 Mar 2022 |
|---|---|---|---|---|
| Assets (₹ Crore) | 644.27 | 647.95 | 622.84 | 619.83 |
| Revenue (₹ Crore) | 75.54 | 375.95 | 371.82 | 352.52 |
| Profit After Tax (₹ Crore) | 2.45 | 15.6 | 15.37 | 13.72 |
| Net Worth (₹ Crore) | 342.25 | 317.06 | 290.37 | 274.8 |
| Total Borrowing (₹ Crore) | 245.36 | 270.54 | 280.65 | 275 |
Key Observations:
- Revenue Growth: For FY 2023-2024, Indo Farm Equipment reported a marginal increase in revenue by 1%, from ₹371.82 crores in FY 2022-2023 to ₹375.95 crores. The first quarter of FY 2024-2025 (June 30, 2024) showed a significant revenue of ₹75.54 crores.
- Profit After Tax (PAT): The company’s PAT has also increased by 1%, from ₹15.37 crores in FY 2022-2023 to ₹15.6 crores in FY 2023-2024. However, the first quarter of FY 2024-2025 shows a relatively lower PAT of ₹2.45 crores.
- Net Worth: The company’s net worth increased from ₹290.37 crores in FY 2022-2023 to ₹317.06 crores in FY 2023-2024, and further rose to ₹342.25 crores by June 30, 2024, signaling positive financial health.
- Borrowing: Total borrowings decreased from ₹280.65 crores in FY 2022-2023 to ₹270.54 crores in FY 2023-2024, and further dropped to ₹245.36 crores in June 2024, indicating a reduction in financial leverage.
Conclusion:
Indo Farm Equipment has shown modest growth in its financial performance, with stable revenue and profit growth. The company’s assets and net worth have been increasing, and its borrowing levels have decreased, reflecting improved financial stability. However, the relatively flat PAT growth and the slight decline in Q1 earnings may suggest challenges in achieving higher profitability in the short term.
Key Performance Indicators
- ROE (Return on Equity): 5.13%
- ROCE (Return on Capital Employed): 8.96%
- Debt-to-Equity Ratio: 0.01
- P/E (Price to Earnings Ratio): 105.25 (post-issue)
Use of IPO Proceeds
The funds raised from the IPO will primarily be used for:
- Expanding the manufacturing capacity for pick & carry cranes.
- Repaying certain borrowings.
- Further investments in the company’s NBFC subsidiary to augment its capital base.
- General corporate purposes.
Investment Considerations
The company operates in the agricultural equipment and machinery sector, which holds promising long-term growth potential. However, concerns regarding its Net Debt/EBITDA ratio (18.82) as of June 2024 and its relatively high P/E ratio may raise caution among some investors. Given its solid position in the tractor and crane manufacturing market, coupled with ongoing capacity expansion, Indo Farm Equipment may present moderate investment potential for well-informed, long-term investors.
IPO Summary:
- IPO Size: ₹260.15 Crores
- Issue Type: Book Built Issue
- Price Band: ₹204 to ₹215 per share
- Lot Size: 69 shares (₹14,835 minimum investment for retail investors)
- Listing: BSE, NSE (January 7, 2025)
- Lead Manager: Aryaman Financial Services Limited
- Registrar: Mas Services Limited
Recommendation:
Based on the company’s prospects in the agricultural machinery segment and the current financial metrics, experts have expressed a balanced outlook on the Indo Farm Equipment IPO. While some brokers suggest subscribing to the issue, others recommend a more cautious approach due to the aggressive pricing and the company’s relatively high debt levels.
