Ajax Engineering IPO booked 28% on Day 1: Here's all you need to know

The initial public offering (IPO) of Ajax Engineering Ltd opened to tepid demand from investors on Monday, February 10. The mainboard issue was booked 28% on Day 1.

The concrete equipment and services company aims to raise ₹1,269.35 crore from the primary market through its maiden share sale. The issue will close for bidding on February 12.

Here are the key details like subscription status, price band, offer size, business model and key risks about Ajax Engineering IPO for the investors looking forward to participating in the bidding process.

subscription status

On the first day of bidding, the issue was overall subscribed 28% till 5:20 pm. The IPO attracted bids for more than 39.1 lakh shares against 1.41 crore shares on offer.

Retail investors booked 29% of their allocated quota of over 70.35 lakh shares by applying for 20.60 lakh shares. The non-institutional investors (NIIs) subscribed their segment 28% with bids for 6.62 lakh shares against 30.15 lakh shares reserved for the category. The Qualified Institutional Buyers (QIBs) applied for only 10.32 shares against 40.2 lakh shares set aside for them.

The employees’ quota was booked 54% with bids for 42,343 shares against the reserved portion of 78,947 shares.

IPO price band and offer size

Ajax Engineering IPO is an exclusive offer-for-sale (OFS) of 2.02 crore shares, aggregating to ₹1,269.35 crore. The issue does not include any fresh issue component.

The company has fixed the price band at ₹599 to ₹629 per share for the IPO. The minimum lot size is 23 shares. The retail investors need to apply for at least a single lot size, aggregating to a minimum investment of ₹14,467.

ICICI Securities Ltd, Citigroup Global Markets India Private Ltd, JM Financial Ltd, Nuvama Wealth Management Ltd, and SBI Capital Markets Ltd are the book-running lead managers of the Ajax Engineering IPO. Link Intime India Private Ltd is the registrar of the public offer.

IPO key dates

The IPO allotment status is expected to be finalised on Thursday, February 13. Refunds will be issued on Friday, February 14, and the allottees will also receive shares in the Demat accounts on the same day.

The company has proposed to list shares on the NSE and BSE on Monday, February 17.

Business Model

Ajax Engineering specialises in manufacturing concrete equipment, offering innovative solutions tailored to the construction sector. Their product line-up includes self-loading concrete mixers (SLCMs), batching plants, boom pumps and self-propelled boom pumps, which play a crucial role in major infrastructure projects such as transportation, irrigation and industrial development.

With an extensive network comprising 51 dealerships across 23 Indian states and 25 international locations spanning South and Southeast Asia, the Middle East, and Africa, Ajax Engineering caters to a broad customer base. The company enjoyed a dominant position in the sector with a 75% volume share in FY24 and 77% in H1FY25, while achieving significant growth in stationary concrete pumps and boom pumps between FY22 and FY24.

As of September 30, 2024, the company has four assembling and manufacturing facilities at Obadenahalli, Gowribidanur and Basethahalli in Karnataka, each specialising in distinct product lines. Besides, an assembling and manufacturing facility at Adinarayanahosahalli, Karnataka, is under construction and expected to become operational in August 2025.

Risks and strengths

** Strengths**

• Market Leadership in SLCMs: Ajax Engineering dominates the self-loading concrete mixer (SLCM) segment in India with a 75% market share (FY24). The company has also recorded a 51.04% CAGR growth (FY22–FY24) due to sustained demand.
• Comprehensive Product Portfolio: With 110+ product variants across the concrete equipment value chain, the company caters to a broad spectrum of construction needs, enhancing its market positioning.
• Innovation and R&D Capabilities: Ajax Engineering invests in technology with 76 in-house engineers, patented solutions such as the self-propelled boom pump and SLCM with load cell, and its TASC R&D and training centres, fostering advancements in concrete technology and workforce development.
• Operational Efficiency: The company operates four lean manufacturing facilities in Karnataka, ensuring over 90% localisation of materials. Its 546-partner supplier network and automated processes contribute to high efficiency and stringent quality control.
• Robust Sales and Service Network: Ajax has a strong dealer network with 51 exclusive dealerships across 23 states, 114 touchpoints, and 34 service centers in India. It also has 25 international dealers across South and Southeast Asia, the Middle East, and Africa, ensuring broad market reach and efficient after-sales service.

• Revenue Concentration in SLCMs: The company’s 85.13% of revenue (FY24) comes from SLCMs, making it vulnerable to any decline in demand in this segment, particularly due to market fluctuations in the construction and infrastructure sectors.
• Seasonal Impact: The company’s performance is influenced by the cyclical nature of the concrete equipment industry, with seasonal factors like the monsoon and festival seasons potentially impacting sales and profitability.
• Supply Chain and Cost Factors: Less than 10% of raw materials are imported, which exposes the company to risks related to price volatility, supply chain disruptions, and material quality concerns. Any such disruption will affect production and margins.
• Operational Risks: With 99% of SLCM assembly dependent on the Obadenahalli facility, any disruptions, whether due to labour disputes, infrastructure breakdowns, natural disasters, or regulatory changes, could severely impact operations.

Key Financials

Use of IPO proceeds