Carraro India IPO

Carraro India IPO Details

Carraro India IPO Date

Carraro India IPO will open for subscription on December 20, 2024, and close on December 24, 2024. On December 24, 2024, investors will be updated about the allotment status. 

Investors who have been allotted the company’s shares can expect them to be credited into their demat accounts on December 27, 2024. The shares will be listed on the NSE and the BSE on December 30, 2024. 

Carraro India IPO Price Band

The IPO is a book-built issue of ₹1,250 crore and is entirely an offer-for-sale (OFS) of 1.78 crore shares. The Carraro India IPO price band has been set between ₹668 to ₹704 per share. Interested investors can choose a price within this band to apply for the IPO. 

The Carraro India IPO listing price will be determined on December 30. The listing price is the price at which a company’s shares debut on the stock exchanges.

Carraro India IPO Lot Size

Carraro India IPO details have been declared. The minimum lot size for an application is 21 shares, and the investor would have to apply for a minimum of 1 lot. Meanwhile, the IPO issue size is approximately ₹1,250 crore.

Carraro India IPO Objective

The entire proceeds from the issue will be received by the promoter selling shareholder, after deducting the offer expenses and relevant taxes. The company will not receive any proceeds from the IPO. The objective of the offer is to achieve the benefits of listing shares on the bourses and carry out the offer-for-sale for the promoter-selling shareholder. The listing will also enhance the company’s visibility and brand image. 

About Carraro India IPO

Incorporated in 1997, Carraro India Limited is a technology-driven supplier of complex engineering products and solutions, primarily serving the agricultural and construction vehicle sectors. It specialises in the design, manufacture and supply of axles, transmission systems, gears and other essential components for original equipment manufacturers (OEMs). 

The company operates as part of the Carraro Group, a global leader in transmission systems. Carraro India is known for leveraging the research and development (R&D) capabilities of its parent company to establish a strong presence in India. 

Carraro India's product portfolio includes axles and transmission systems for agricultural tractors and construction vehicles. Additionally, the company supplies gears, shafts and ring gears for the industrial and automotive sectors. The products are crucial for OEMs’ performance and reliability. 

The company operates two advanced manufacturing plants in Pune that manufacture drivelines and gears. In FY24, capacity utilisation was 81.07% and 89.94%, respectively, for both plants. Meanwhile, in FY24, the company earned 64.13% of the total revenue from domestic clients, while the rest came from export business. 

As of September 30, 2024, the company had a client base of 38 customers in India. Some of its clients include Mahindra and Mahindra, Escorts Kubota Limited, John Deere India Private Limited, Action Construction Limited, and many others. The company has long-term relationships with its clients, with an average of more than 15 years with its top 10 clients. Furthermore, the company has developed a network of 220 suppliers based in eight states in India and 58 suppliers internationally.   

Between FY22 and FY24, the company's revenue from operations rose at a CAGR of 9.3%, while net profit rose 67.03% during the same period. Meanwhile, the global sales of construction vehicles and agricultural tractors are projected to increase significantly, hitting 4,640,000 units by CY2029 compared to 3,560,000 units in Calendar Year (CY) 2023. This upbeat industry trend could help companies like Carraro India Limited to expand its business and increase market share. 

Now, Carraro India Limited is launching its initial public offer (IPO). The total IPO issue size is ₹1,250 crore, comprising entirely of an offer for sale. The money raised from the issue will be received by its selling shareholders. Its shares will be listed on the NSE and BSE.

Company Name: Carraro India Limited

Company Established on: April 11, 1997

Company Type: Private Limited Company

Managing Director: Balaji Gopalan

Financial snapshot

Carraro India IPO Analysis

Strengths and Opportunities

1. The company is a leading tier 1 supplier of transmission systems and a key supplier of axles in the Indian agricultural tractor and construction vehicle industries. 
2. It offers customised solutions to original equipment manufacturers (OEMs). 
3. The company has a longstanding relationship of over 15 years with local and international suppliers. 
4. It has robust in-house  R&D capabilities that allow for the innovation of future-ready products.
5. Its revenue from the agricultural tractors sector increased at a CAGR of 3.13%, reaching ₹793.38 crore in FY24 from ₹745.9 crore in FY22. 
6. Its revenue from the construction vehicle sector increased at a CAGR of 16.85%, increasing to ₹727.17 crore in FY24 from ₹532.57 crore in FY22. 
7. The company’s manufacturing plants are technologically advanced with large production capacities.
8. It has an experienced senior management team with industry knowledge that helps it to grow and achieve margin optimisation. 
9. It aims to help local vendors cut production costs, optimise supply chain logistics, and minimise lead times. 
10. For the six months ended September 30, 2024, and FY24, FY23 and FY22, it sourced 74.42%, 73.18%, 74.58% and 73.67% of its materials from domestic suppliers, respectively. 

Risks and Threats

1. The company relies heavily on its top 5 to 10 customers for most of its revenue. The inability to retain these key customers or attract new ones can affect its business and operations. 
2. Any disruption in its relationship with Carraro Group, on which it depends partially for its operations, can adversely affect its business. 
3. Its agricultural tractor business is seasonal in nature. 
4. The company has high working capital requirements and borrowings. The inability to repay the outstanding debt can impact its cash flow, credit rating and financial condition. 
5. It is dependent on the performance of the tractor and construction vehicle markets and changes in these sectors can impact its financial performance and future prospects.
6. Disruptions in its manufacturing plants in Pune can impact its operations and financials.  
7. The company depends on its global customer base, and its inability to maintain the stability of our OEM customer base can negatively affect its operations. 
8. Any unfavourable outcomes in the company's outstanding legal cases can impact its business, reputation, and financial condition. 
9. Failing to meet quality standards can result in the cancellation of existing and future orders.
10. It has suffered from negative cash flows in the past. 

How to apply for the Carraro India IPO?

If you are interested to invest in Carraro India IPO, following are the steps to apply:

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Carraro India IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Apply’
7. Accept the mandate on your UPI app

You can also pre-apply for the Carraro India IPO on Upstox which usually begins a day before the IPO opens for subscription.