Ajax Engineering IPO: Kedaara Capital-backed issue sees muted response on Day 1

Ajax Engineering

The initial public offering (IPO) of Ajax Engineering saw a muted response on its first day of bidding on February 10, being subscribed only 28 percent. The self-loading concrete mixers manufacturer aims to raise Rs 1,269 crore through its maiden issue.

The IPO received bids for 39.45 lakh shares, as against the offer size of 1.41 crore shares, according to data on NSE. Qualified Institutional Buyers (QIBs) booked 26 percent of the portion reserved for them. The portion reserved for non-institutional investors (NII) was subscribed 28 percent, while that kept for retail individual investors was booked 29 percent.

Issue Details:

Ajax Engineering has set a price band of Rs 599-629 per share for the IPO which solely comprises an offer-for-sale of over 2 crore shares by the existing shareholders. The IPO will be open for subscription from February 10 to February 12. The company will finalise IPO share allotment by February 13, while the trading in Ajax shares will commence on the BSE and NSE from February 17. Retail investors can bid for a minimum of 23 equity shares, requiring an investment of Rs 14,467 at the upper price band.

Grey Market Premium (GMP):

Ahead of the listing, the unlisted shares of the company were trading with a grey market premium (GMP) of around 7 percent at Rs 675 per share, as per data on Investorgain on February 10.

Before the IPO opened for subscription, the concrete equipment manufacturer raised Rs 379.31 crore from 23 institutional investors via anchor book on February 7. "Out of the total allocation of 60.3 lakh shares to anchor investors, 19.35 lakh shares were allocated to 5 domestic mutual funds, which have applied through a total of 8 schemes," Ajax Engineering said.

As the IPO is purely an offer-for-sale, the offer proceeds will go to the selling shareholders including investor Kedaara Capital Fund II LLP which is exiting the company via public issue.

The merchant bankers handling the Ajax Engineering IPO are ICICI Securities, Citigroup Global Markets India, JM Financial, Nuvama Wealth Management, and SBI Capital Markets.

About the company:

With four assembling and manufacturing facilities in Karnataka, the concrete equipment manufacturer which competes with listed entities like Action Construction Equipment, BEML, and Escorts Kubota, holds 77 percent market share in the self-loading concrete mixers segment.

Ajax Engineering has recorded healthy financial performance in the past years with the profit in fiscal 2024 growing sharply by 65.7 percent to Rs 225.1 crore and revenue increasing by 51.3 percent to Rs 1,741.4 crore compared to previous financial year. Profit in the six months period ended September 2024 soared b 21.8 percent to Rs 101 crore and revenue grew by 12.4 percent to Rs 770 crore compared to the corresponding period last fiscal.