Indo Farm Equipment IPO

Indo Farm Equipment IPO Details

Indo Farm Equipment IPO Date

The Indo Farm Equipment IPO will open for subscription on December 31, 2025, and the closing date for the IPO is January 2, 2025, according to the offer document filed by the company with the SEBI. After this, investors are expected to be updated about the allotment status on January 3, 2025.

Investors who have been allotted shares can expect them to be credited to their demat account on January 6, 2025. The shares will be listed on the NSE and the BSE on Friday, January 7, 2025. 

Indo Farm Equipment IPO Price Band

The IPO combines a fresh issue and an offer-for-sale (OFS) component. The IPO price band has been set between ₹204 to ₹215 per share. Interested investors can choose a price within this band to apply for the IPO. 

The IPO is a book-building issue of ₹260.15 crore, with a fresh issue of 86 lakh shares (totalling ₹184.90 crore) and an offer-for-sale component of 35 lakh shares (totalling ₹75.25 crore). 

The Indo Farm Equipment IPO listing price will be determined on January 7, 2025. The listing price is the price at which a company’s shares debut on the stock exchanges.

Indo Farm Equipment IPO Lot Size

The Indo Farm Equipment IPO details have been declared. The minimum lot size for an application is 69 shares, and the investor would have to apply for a minimum of 1 lot. Meanwhile, the IPO issue size is ₹260.15 crore. 

Indo Farm Equipment IPO Objective

The company proposes to utilise the net proceeds of the fresh issue in the following manner:

Business expansion: The company will use ₹71.1 crore from the net IPO proceeds to set up a new dedicated unit to expand its pick-and-carry crane manufacturing capacity.

Investments in subsidiaries: ₹45 crore will be invested in the NBFC subsidiary (Barota Finance Ltd.) to augment the capital base and meet future capital requirements.

Loan Repayment: Around ₹50 crore will be used to repay or prepay certain outstanding borrowings of the company. 

General corporate purposes: The remaining funds will be used for general corporate needs to expand business. 

Meanwhile, net proceeds from the offer for sale component will be received by the promoter selling shareholders and the company will not receive any proceeds from this. The listing will also enhance the company’s visibility and brand image.

About Indo Farm Equipment

Incorporated in 1994, Indo Farm Equipment is a fully integrated manufacturer of tractors, pick-and-carry cranes, and other farm equipment like harvesters and rotavators. The company has over two decades of experience in manufacturing tractors ranging from 16 HP to 110 HP and pick-and-carry cranes ranging from 9 tons to 30 tons. 

The company’s products are sold under its own brand names, with most of the sales (around 93%) coming from the domestic markets, while the rest, 7%, come from export sales. The company’s products cater to different sectors, including agriculture, infrastructure, construction, heavy engineering, and industrial projects. Meanwhile, these products are distributed through 175 dealers across key states, including Punjab, Haryana, Uttar Pradesh, and Maharashtra.

In 2017, Indo Farm Equipment launched its in-house NBFC company, Barota Finance, to expand further and complement its current business. The NBFC business provides tractor financing solutions to clients. As of June 30, 2024, the company served 5,900 clients with a total loan book of ₹127.15 crore. Gross and net NPA stood at 4.13% and 3.00%, respectively. 

The company has ISO-certified manufacturing facilities in Baddi, Himachal Pradesh, covering 127,840 square metres. This manufacturing facility has the in-house capacity to manufacture over 330 components used in making a tractor and over 190 components used in making cranes. In-house capacity helps manage cost, quality and reduces dependency on other auto-ancillary makers for critical parts. 

As of September 2024, the company has a production capacity of 12,000 tractors and 1,280 pick-and-carry cranes annually. Using IPO proceeds, the company plans to expand its crane manufacturing capacity by 3,600 units per year.

Between FY22 and FY24, the company's revenue from operations rose at a CAGR of 3.23%, while net profit rose 6.62% during the same period. Meanwhile, the Indian agricultural machinery market, which is dominated by tractors, is expected to grow at a CAGR of 8.5% in the next five years to reach $25.15 billion by 2029.   

Now, Indo Farm Equipment is launching its initial public offer (IPO). The total IPO issue size is ₹260.15 crore, comprising a fresh issue and an offer-for-sale component. Its shares will be listed on the NSE and BSE.

Company Name: Indo Farm Equipment Limited

Company Established on: October 5, 1994

Company Type: Public Limited Company

Chairman and Managing Director: Ranbir Singh Khadwalia

Financial snapshot

Indo Farm Equipment IPO Analysis

Strengths and Opportunities

1. The company has a fully integrated and established management setup spread across 127,840 square metres.
2. Its R&D centre, equipped with specialist engineers and updated technology, enables it to provide personalised solutions to its customers. 
3. It has developed indigenous technology for tractor and crane models. 
4. The company has an in-house NBFC for financing its tractors. Its NBFC has a total Loan Book (Vehicle Finance) of ₹ 127.15 crore and served over 5,900 active customers as of June 30, 2024. 
5. As of June 30, 2024, its gross and net NPA stood at 4.13% and 3%, respectively. 
6. The company manufactures a diverse range of products. Its pick-and-carry cranes are widely used in the engineering, construction, and infrastructure industries. 
7. For the six months ended June 30, 2024, and FY24, FY23 and FY22, the company’s EBITDA stood at ₹12.66 crore, ₹62.52 crore, ₹58.72 crore and ₹52.07 crore, and the EBITDA margins were 16.75%, 16.63%, 15.79% and 14.77%, respectively.
8. It has a wide international footprint with operations in many countries including Italy, Japan, Jordan, Kenya, Poland, the United Kingdom, Uruguay, Nepal, etc. 
9. The company focuses on the niche market of pick-and-carry cranes. 

Risks and Threats

1. The company relies heavily on tractor and pick-and-carry crane sales, and any disruptions in demand or manufacturing could negatively impact its business and financial performance.
2. Failure to obtain or renew necessary licenses and approvals can adversely affect the company’s operations and financial health.
3. Its expansion plans are at risk of delays and cost overruns, which can hinder the company's growth and financial performance. 
4. The company’s sales are driven mainly in India, and the expansion of pick-and-carry crane manufacturing depends on uncertain domestic demand. This can impact its operations and financial performance. 
5. The company’s tractor sales depend on financing from banks, NBFCs, and its subsidiary NBFC, which exposes it to financing and regulatory risks.
6. In the event of unfavourable outcomes, ongoing legal proceedings can negatively affect the company's business, reputation, and financial position. 
7. The geographical concentration of facilities in Himachal Pradesh can limit and affect its business operations and flexibility. 
8. Poor inventory management, raw material price volatility, and operational inefficiencies can harm a company’s financial performance. 
9. Dependence on top suppliers, top dealers and revenue from the top five states can impact the company’s performance, making it vulnerable to fluctuations. 

How to apply for the Indo Farm Equipment IPO?

If you are interested to invest in Indo Farm Equipment 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 ‘Indo Farm Equipment 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 Indo Farm Equipment IPO on Upstox which usually begins a day before the IPO opens for subscription.