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What is an IPO?
An IPO (Initial Public Offering) is the process through which a private company offers its shares to the public for the first time. This allows the company to raise capital from public investors and become publicly traded on a stock exchange.
IPO Details
- Bidding Dates: 31 Dec 2024 – 2 Jan 2025
- Minimum Investment: Rs. 14,076
- Lot Size: 69 shares
- Price Range: Rs. 204 – Rs. 215
- Issue Size: Rs. 260.15 crore
Subscription Rate as of 31 Dec 2024, 03:00 PM:
- Qualified Institutional Buyers (QIB): 0.01x
- Non-Institutional Investors (NII): 7.05x
- Retail Individual Investors (RII): 8.07x
- Total Subscription Rate: 5.55x
About Indo Farm Equipment
- Founded: 1994
- Specialization: Manufacturing tractors, pick-and-carry cranes, and agricultural equipment (harvester combines, rotavators)
- Sectors Served: Agriculture, infrastructure, construction, heavy engineering, and industrial projects
- Diversification: Entered retail financing in 2017 with an in-house non-banking financial company (NBFC)
- Managing Director: Mr. Ranbir Singh Khadwalia
- Parent Organization: Indo Farm Equipment Ltd
Strengths of Indo Farm Equipment
- ISO-certified Manufacturing Facilities: ISO 9001:2015 certified quality management systems with advanced machinery (induction furnaces, automatic molding lines, and metallurgy testing labs)
- Robust Production Capacity: 12,000 tractors and 720 pick-and-carry cranes annually, offering a wide range of tractors (16 HP to 110 HP) and cranes (9 tonnes to 30 tonnes)
- Extensive Dealer Network: Over 140 dealers across key states like Punjab, Haryana, Uttar Pradesh, Maharashtra, Gujarat, and Rajasthan
Risks and Concerns
- Legal Proceedings: Ongoing legal cases that could impact business operations
- Revenue Dependency: Heavy reliance on tractors (65.46% of total sales in FY23) and cranes (34.25% of total sales in FY23); disruption in either product could affect financials
- Geographic Concentration: Primarily operates in North India; regional disruptions could negatively affect operations
- High Contingent Liabilities: Rs. 18.24 crore as of March 31, 2023, which could impact financial position if materialized
- Dealer Dependency: Top 10 dealers contributed 19.75% of revenue in FY23; issues with dealers could harm revenue
- High Borrowings: Rs. 280.65 crore outstanding borrowings as of March 31, 2023; failure to service loans could hurt finances
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Financial Growth
Should You Apply?
The IPO presents a strong investment opportunity due to Indo Farm’s strong production capabilities, extensive dealer network, and consistent financial growth. However, the company faces risks related to legal proceedings, geographic concentration, and high borrowings. The retail subscription rate of 8.07x indicates substantial interest, and if you're looking to diversify your portfolio with a focus on agriculture and infrastructure, this IPO may be a good choice.
Application Details