Ajax Engineering IPO price band set at ₹599-629: Check lot size, business model, competitors & more

Ajax Engineering Ltd will launch its initial public offering on February 10 to raise ₹1,269.35 crore from investors in the primary market. The company has fixed the price band at ₹599 to ₹629 per share for the initial share sale.

Ajax Engineering IPO details

Ajax Engineering IPO will be open for subscription from February 10 to 12. It is an entirely offer for sale of 2.02 crore shares by selling shareholders. The price band is ₹599 to ₹629 per share, and the lot size is 23 shares.

The IPO share allotment is expected on February 13. Ajax Engineering IPO is expected to list shares on BSE and NSE on February 17.

Ajax Engineering business details

Ajax Engineering is a concrete equipment manufacturer that offers a range of equipment, services, and solutions across the concrete application value chain.

The company has developed an extensive product portfolio that includes self-loading concrete mixers (SLCMs), batching plants for concrete production, transit mixers for transportation, boom pumps, concrete pumps, and self-propelled boom pumps for concrete placement, slip-form pavers for concrete paving, and 3D concrete printers for depositing concrete.

The company is a leading producer of SLCMs in India. It has around 77% market share in the SLCM segment during the six-month period ending September 30, 2024. The company accounted for 75%, 77% and 86% of the number of SLCMs sold in the Financial Years 2024, 2023 and 2022, respectively.

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. The Obadenahalli Facility of Ajax Engineering is among the largest SLCM facilities globally in terms of area, as of March 31, 2024.

The company also runs The Ajax School of Concrete - a research and development and training facility. The company is also engaged in the research and development of pre-mixes optimised for 3D printing applications, where precise material properties are critical for effective extrusion and setting of concrete.

Ajax Engineering sells products through its dealers in and outside India. As of September 30, 2024, the company’s network comprised 51 dealerships across 23 states in India and 114 customer touchpoints. The network also included 51 dealer headquarters and 63 branches (of which 34 also act as service centres) managed and operated by its dealers.

Strengths

• Ajax Engineering is the market leader in a large and fast-growing SLCM market
• It has a comprehensive portfolio of 141 concrete equipment variations and offers services and solutions across the concrete application value chain.
• It has strong in-house design and development capabilities
• Large dealer network with 114 touchpoints in 23 states
• A diversified customer base includes individual contractors, small and mid-sized contracting companies, rental companies, large construction companies and government construction agencies.
• Concrete equipment has diverse use cases and is deployed across transportation projects such as roads, railway lines, irrigation projects and infrastructure projects.

Risks and weaknesses

• The company derives a significant majority of revenue from selling self-loading concrete mixers (85.13% in FY2024). Any decrease in SLCM sales or demand for concrete equipment in India could adversely affect its business.
• Its business is seasonal, and any decrease in sales during certain quarters could hurt its financial performance.
• The company substantially assembles all SLCMs at its Obadenahalli Facility(99.06% as of September 2024). Any disruptions or stoppages at this facility or other facilities could adversely impact its operations, financial condition, and results of operations.
• The leases for two of its assembling and manufacturing facilities have expired. While it has made applications to obtain ownership of these land parcels, there can be no assurance that we will be successful.
• Proceeds from the IPO issue will not be invested in busienss but will go to selling shareholders.

Ajax Engineering's key competitors

The company faces competition from both domestic and multinational construction equipment manufacturers. These include local companies such as Aquarius Engineers Private Limited and subsidiaries of international companies such as Schwing Stetter (India) Private Limited, Putzmeister India Private Limited, KYB-Conmat Private Limited and Fiori Concrete Machines India Private Limited, among others.

Listed peers manufacturing industrial equipment include Action Construction Equipment Limited, Bharat Earth Movers Limited and Escorts Kubota Limited.

Ajax Engineering IPO financials

Ajax Engineering IPO key metrics