Indo Farm Equipment sets price band of Rs 204-215 a share for IPO

Brokerage Radar

Indo Farm Equipment Ltd has set a price band of Rs 204–215 per share for its Initial Public Offering (IPO), which will open on December 31. The anchor book will commence on December 30, and the issue will close on January 2. Key dates post-issue include the basis of allotment on January 3, refunds and credit of equity shares on January 6, and stock listing on exchanges on January 7.

The IPO consists of a fresh issue of up to 86 lakh shares and an offer for sale (OFS) of up to 35 lakh shares. At the upper price band, the fresh issue is valued at Rs 184.90 crore, while the OFS is valued at Rs 75.3 crore. The total mcap of the firm will be around Rs 1,000 crore.

The proceeds from the fresh issue will be used to establish a dedicated manufacturing unit to expand the production capacity of Pick & Carry Cranes. The total project cost is estimated at Rs 71.13 crore, covering investment in land acquisition, land development, construction of factory buildings, and procurement of equipment, machinery, and furniture.

Additional funds will be utilized for repayment of outstanding debt, which stood at Rs 270.54 crore as of June. A portion of the proceeds will also be invested in Barota Finance, the company’s NBFC arm, to enhance its capital base and support future growth.

Incorporated in 1994, Indo Farm Equipment Ltd is a fully integrated manufacturer of tractors and Pick & Carry Cranes, with a strong track record spanning over two decades. The company also deals in other farm equipment, including Harvester Combines, Rotavators, and related spares, though these contribute marginally to its total revenue.

The company’s manufacturing facilities, spanning 127,840 square meters in Baddi, Himachal Pradesh, include a captive foundry unit, a dedicated machine shop, and fabrication and assembly lines for tractors and cranes. As of September 30, 2024, its production capacity stands at 12,000 tractors and 1,280 Pick & Carry Cranes per annum. The company manufactures tractors ranging from 16 HP to 110 HP and cranes with capacities of 9 tons to 30 tons.

In FY24, Indo Farm Equipment Ltd posted a revenue of Rs 375.23 crore, up from Rs 370.76 crore in FY23. Net profit for the year stood at Rs 15.60 crore, compared to Rs 15.37 crore in the previous year.

For FY24, the company reported tractor sales of 3,168 units compared to 3,772 units in FY23, while crane sales rose to 941 units from 681 units in the previous year. As of June, it had sold 471 tractors and 195 cranes.

Aryaman Financial Services is the sole lead manager for the issue.