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Ahead of the issue opening, the company has garnered ₹78.04 crore from 11 institutional investors via its anchor book launched on December 30.
Negen Undiscovered Value Fund is the largest anchor investors amongst them, buying 6.97 lakh shares worth ₹15 crore, followed by Niveshaay Hedgehogs Fund, and Rajasthan Global Securities, which invested ₹10 crore each in Indo Farm Equipment.
Further, Subham Capital and India Equity Fund picked shares worth ₹7 crore and ₹6 crore, respectively. Chhatisgarh Investments, Saint Capital Fund, Vikasa India, Ashika Global Securities, Shine Star Build Cap, and Smart Horizon Opportunity Fund, which invested ₹5 crore each.
As many as 13 investors participated in the pre-IPO placement including Hathor Corporate Advisors, Own Infracon, Nabs Vriddhii, Finavenue Growth Fund, Niveshaay Hedgehogs, and VM Finserve and Asset Management.
Indo Farm Equipment IPO review
Analysts at Anand Rathi believe that Indo Farm with traditional business value and experienced promoters and well planned capacity expansion, debt repayment and strengthening of financial arm are expected to be capitalising over long run. Hence considering all parameters, they recommend the issue can be ‘Subscribed for long term’.
On valuation parse, at the upper band, the issue is asking for a market capitalisation of ₹1,033 crore and EV/EBITDA at 17, which excludes impact of interest outgo. Based on FY24 earnings, the company is asking a PE (price-to-earnings) of 65x times, which is fully priced.
Indo Farm Equipment IPO: GMP today
According to market observers, the current grey market premium (GMP) of Indo Farm Equipment is ₹80, indicating a premium of 37% to the issue price.
The grey market is an unofficial ecosystem where shares start trading much before the offer opens for subscription and continue to trade till the listing day.
Indo Farm Equipment IPO other details
The IPO of Indo Farm Equipment is a combination of fresh equity issue of up to ₹185 crore and an offer of sale (OFS) of up to 35 lakh shares, taking the total issue size to ₹260 crore.
Around ₹50 crore of the amount raised from the IPO will be utilised for repayment or pre-payment, in full or part, of certain borrowings availed by the company, further investment in NBFC subsidiary (Barota Finance) for financing the augmentation of its capital base to meet its future capital requirements (₹45 crore) and the rest towards general corporate purposes.
The company has undertaken a pre-IPO placement of 19 lakh equity shares at the rate of ₹185 per share aggregating to ₹35.1 crore. Accordingly, the size of the fresh issue has been reduced from 1.05 crore equity shares to 86 lakh equity shares.
Indo Farm Equipment IPO: Structure
Indo Farm Equipment has reserved 50% of the net offer for the qualified institutional bidders (QIBs), while non-institutional investors (NIIs) will have 15% reservation. Retail investors will have 35% of the allocation in the IPO.
Company description
Incorporated in 1994, Indo Farm Equipment is a fully integrated and established manufacturer of tractors and pick-and-carry cranes. It also deals in other farm equipment such as Harvester Combines, Rotovators and other related spares and components, which do not materially contribute to total revenue of the company. Its products are being exported to various countries.
As of fiscal 2024, the company’s revenue from operations was ₹375 crore with a profit after tax of ₹15.5 crore.
Aryaman Financial Services Ltd. is the book running lead manager of the Indo Farm Equipment IPO, while Mas Services Ltd. is the registrar for the issue.
The allotment for the Indo Farm Equipment IPO is expected to be finalised on January 3. Indo Farm Equipment IPO will list on BSE, NSE with tentative listing date fixed as January 7, 2025.
