1 day ago
Shares of Indo Farm Equipment made a decent start to its journey as a public company on Tuesday, January 7, after it garnered a whopping 229.68 times subscription during its three-day bidding period from December 31 to January 2.
The stock opened at ₹256 on the NSE at a premium of 19.07% over its IPO price of ₹215. Similarly, the stock got listed at a premium of 20%, at ₹258.40 on the BSE.
A day ahead of its listing, Indo Farm Equipment shares were commanding a premium of 53% in the grey market.
Prashanth Tapse of Mehta Equities believes the listing gain is justified, as investors expect healthy growth following the expansion of pick-and-carry crane capacities and the strengthening of the dealer network.
Tapse has recommended that conservative investors who received an allotment consider booking profits if the price exceeds expectations. However, long-term investors are advised to HOLD despite potential short-term volatility after the listing and market risks. For non-allotted investors, he suggests accumulating shares on dips that may occur due to profit-booking attempts post-listing.
The IPO of Indo Farm Equipment included 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 had 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.
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. was the book running lead manager of the Indo Farm Equipment IPO, while Mas Services Ltd. was the registrar for the issue.
