Indo Farm Equipment shares list at ₹256 on NSE, up 19% from IPO price

Indo Farm Equipment IPO listing: Indo Farm Equipment shares made a completely flat debut on Friday, January 3, listing at ₹256 on NSE, a premium of 19 percent from issue price of ₹215. On BSE, it listed at ₹258.40, up 20.19 percent from IPO price.

Indo Farm Equipment’s initial public offering (IPO), valued at ₹260.15 crore, was open for subscription from December 31 to January 2. The Indo Farm Equipment’s IPO price band stood at ₹204-215 per equity share.

Following the three days of bidding, Indo Farm Equipment IPO closed with exemplary demand, garnering 227.67 times bids. The IPO received bids for 192.83 crore shares against 84.70 lakh shares on offer. The retail investor segment was booked 101.79 times, while the non-institutional investors (NII) category was subscribed 501.75 times. Meanwhile, the Qualified Institutional Buyers quota was bid 242.4 times on the 3 days of bidding.

About the IPO

Indo Farm Equipment IPO was is a combination of fresh issue of 0.86 crore shares aggregating to ₹184.90 crore and offer for sale of 0.35 crore shares aggregating to ₹75.25 crore. Post the issue, promoter shareholding in the company will reduce to 69.44 percent from 93.45 percent before the IPO. Retail investors could apply with a minimum lot size of 69 shares, requiring a minimum investment of ₹14,835.

Indo Farm Equipment IPO raised ₹78.05 crore from anchor investors ahead of the IPO on December 30, 2024.

The key objectives of the net fresh issue are to secure funds for setting up a dedicated unit to enhance the manufacturing capacity of pick-and-carry cranes, repay or prepay specific borrowings either fully or partially, and strengthen the capital base of the company’s NBFC subsidiary, Barota Finance Ltd., through further investments. A portion of the funds will also be used for general corporate purposes.

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

Review

Most brokerages have recommended subscribing to the Indo Farm Equipment IPO, citing long-term growth potential despite some concerns over valuations.

SBI Securities: Subscribe

SBI Securities has advised subscribing to the issue at the cut-off price for long-term investment. The brokerage acknowledged slower CAGR growth between FY22-24, with sales, EBITDA, and PAT increasing at 3.2 percent, 9.5 percent, and 6.6 percent, respectively. However, analysts highlighted a robust 45 percent CAGR in pick-and-carry crane sales over the past three years, with the plant operating near full capacity.

Anand Rathi: Subscribe for Long-Term

Anand Rathi has also assigned a ‘Subscribe’ rating, citing the company’s traditional business value, experienced promoters, strategic capacity expansion, debt repayment plans, and efforts to strengthen its financial arm. The brokerage noted that at the upper price band of ₹215, the IPO implies a market capitalization of ₹1,033.1 crore and an EV/EBITDA of 17, excluding the impact of interest outgo. Based on FY24 earnings, the company is valued at a PE ratio of 65x, which the brokerage described as fully priced.

About the Company

Established in 1994, Chandigarh-based Indo Farm Equipment specializes in manufacturing tractors, pick-and-carry cranes, and other harvesting equipment. The company operates under two brands, Indo Farm and Indo Power, and exports its products to countries including Nepal, Syria, Sudan, Bangladesh, and Myanmar. Indo Farm Equipment produces tractors ranging from 16 HP to 110 HP and pick-and-carry cranes with a capacity of 9 to 30 tons. Its Baddi facility in Himachal Pradesh, spread across 127,840 square meters, houses a foundry, machine shop, and assembly units, with an annual production capacity of 12,000 tractors and 1,280 pick-and-carry cranes.

For the financial year ending March 31, 2024, the company reported a 1 percent increase in revenue and a 1 percent rise in profit after tax (PAT) compared to the previous fiscal year.

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