Craftsman Automation stock gains as firm launches Rs 1,200 crore QIP issue

In the last one year, Craftsman Automation stock has risen around 18 percent, underperforming benchmark Nifty 50 which delivered returns of over 25 percent during this period.

Shares of Craftsman Automation gained on June 19, a day after the company has initiated a Qualified Institutional Placement (QIP) to raise Rs 1,200 crore.

The automation firm's board approved the QIP with a floor price of Rs 4,426.11 per share, a discount of around 7 percent from the previous closing price.

Earlier in April, Craftsman Automation announced plans for an initial investment of Rs 150 crore to set up a greenfield plant in Bhiwandi, Rajasthan. The new plant is expected to unlock the growth potential of the company's three major verticals - powertrain, aluminium products and industrial engineering.

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The precision manufacturing company had said that the upcoming facility at Bhiwadi was a 'strategic investment for us to capitalise on the large and growing business opportunities in the North'.

“The greenfield unit, together with our unit at Faridabad, will allow us to service our customers better and faster, strengthen our presence in North India and emerge as a critical business driver over the coming years,” S Ravi, company chairman and MD had said.

Craftsman is an engineering company with vertically integrated manufacturing capabilities, engaged in 3 business segments: Automotive - Powertrain and Others, Automotive – Aluminium Products, and Industrial and Engineering.

The company counts all major auto OEMs and key players in the industrial segment as its key clients.

In the automotive segment, its key clients include Daimler India, Tata Motors, Ashok Leyland, M&M, TAFE, Escorts, John Deere, JCB India, TVS Motors, and Royal Enfield, among others. Its clientele in industrial & engineering segments includes Siemens and Mitsubishi Heavy Industries.

Craftsman Automation is a major player in the machining of cylinder blocks and heads in the M&HCV segment, and is expected to benefit from the resilient demand for commercial vehicles and industrial segments.

Also Read | Craftsman Automation approves QIP of up to Rs 1,200 crore

In the previous session, shares of Craftsman Automation ended 1.2 percent higher at Rs 4,770.00 on the National Stock Exchange (NSE). In the last one year, the stock has risen around 18 percent, underperforming benchmark Nifty 50 which delivered returns of over 25 percent during this period.

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