Kross files draft papers with Sebi to raise Rs 500 crore via IPO

Kross files draft papers for Rs 500-crore IPO

Trailer axle and suspension assembly manufacturing company Kross has filed draft papers with the capital markets regulator to raise Rs 500 crore via an initial public offering.

The IPO is a mix of a fresh issuance of shares worth Rs 250 crore by the company and an offer-for-sale (OFS) of shares worth Rs 250 crore by promoters.

Promoters Sudhir Rai and Anita Rai will be selling shares worth Rs 168 crore and Rs 82 crore respectively in the OFS.

The Jharkhand-based forged and machined components maker may also consider fundraising of Rs 50 crore via pre-IPO placement. If the said pre-IPO placement is undertaken, the fresh issue size will be reduced to the extent of Rs 50 crore.

The firm will make use of net fresh issue proceeds for the purchase of machinery and equipment for Rs 70 crore and working capital requirements of Rs 30 crore. The repaying of debts amounting to Rs 90 crore will also be done by fresh issue proceeds, and the remainder funds will be kept aside for general corporate purposes.

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The Rai-family promoted company which caters to M&HCV and farm equipment segments, has reported healthy financial performance in the past years with the profit rising 154.2 percent on-year to Rs 30.93 crore for the year ended March FY23, driven by strong topline and operating numbers.

Revenue from operations grew by 64.3 percent year-on-year to Rs 488.6 crore during the past financial year. EBITDA (earnings before interest, tax, depreciation and amortisation) during the same period increased sharply by 95 percent to Rs 57.5 crore with a margin expansion of 184 bps at 11.77 percent for the year.

Profit in the first quarter of the current financial year (FY24) stood at Rs 8 crore on revenue of Rs 143.7 crore.

Kross has long-standing relationships with several leading OEMs (original equipment manufacturers) including Ashok Leyland, and Tata International DLT.

Equirus Capital is appointed as the merchant banker for the issue.