Indo Farm Equipment IPO: GMP, subscription status, other key details. Should you apply on second day?

Indo Farm Equipment IPO: The initial public offering (IPO) of tractor manufacturer Indo Farm Equipment Ltd is witnessing a strong demand as the IPO got heavily oversubscribed on the first day of the bidding. The Indo Farm Equipment IPO has entered the second day of its subscription period on January 1. Interested investors now have only two days left to apply for the Indo Farm Equipment IPO.

Indo Farm Equipment IPO opened for subscription on December 31, and will close on January 2. As the second day of the bidding period has commenced, let us take a look at Indo Farm Equipment IPO GMP, subscription status, review and other key details.

Indo Farm Equipment IPO GMP

Indo Farm Equipment shares are commanding a strong grey market premium (GMP) on the second day of the bidding. According to the stock market observers, Indo Farm Equipment IPO GMP today is ₹96 per share. This indicates that Indo Farm Equipment shares are trading at ₹311 apiece in the grey market, a premium of 45% to the issue price of ₹215 per share.

Indo Farm Equipment IPO Subscription Status

Indo Farm Equipment IPO has been subscribed 25.74 times so far. The issue received bids for 21.79 crore equity shares as against 84.70 lakh shares on the offer, as per NSE data till 11:10 AM on January 1, the second day of the bidding process.

The Retail Investors category has been booked 26.53 times, while the Non Institutional Investors (NII) segment has been subscribed 47.35 times so far. The Qualified Institutional Buyers (QIBs) portion has been booked 8.13 times.

Should you apply for Indo Farm Equipment IPO?

Indo Farm Equipment IPO is priced at a P/E ratio of 51.8x on the upper price band, based on FY24 earnings, which is relatively high compared to its peers. However, given the company’s improving sales, growth-oriented investment in its NBFC, and favorable industry trends, we recommend a ‘Subscribe’ rating for the issue, said BP Equities.

On valuation parse at the upper band of ₹215 per share, the issue is asking for a Market Cap of ₹1,033.1 crore and EV/EBITDA at 17 which excludes impact of interest outgo. Based on FY24 earnings, the company is asking a PE of 65x times which is fully priced.

“Therefore we believe that the 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 the long run. Hence considering all parameters, we recommend the issue can be considered as Subscribe for long term,” Anand Rathi said.

Indo Farm Equipment IPO Details

Indo Farm Equipment IPO opened for subscription on Tuesday, December 31, and will close on Thursday, January 2. The IPO allotment is expected to be finalised on January 3, and the IPO listing date is January 7.

Indo Farm Equipment IPO price band has been set at ₹204 to ₹215 per share. At the upper-end of the price band, the company aims to raise ₹260.15 crore from the book-built issue which is a combination of fresh issue of 86 lakh equity shares worth ₹184.90 crore and offer-for-sale of 35 lakh shares amounting to ₹75.25 crore.

The company raised ₹78 crore from anchor investors ahead of its IPO subscription opening. The company has allotted 36.30 lakh shares to 11 entities at ₹215 per equity share, the upper end of the price band.

Aryaman Financial Services is the book running lead manager of the Indo Farm Equipment IPO, while Mas Services is the IPO registrar.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.