Carraro India IPO: Auto parts maker raises ₹375 crore from anchor investors ahead of subscription | Stock Market News

Carraro India IPO: Carraro India Ltd raised ₹375 crore from anchor investors head of its IPO subscription opening for bidding tomorrow. The initial public offering (IPO) of the auto parts manufacturer will open for its three-day subscription period on Friday, December 20 and close on Tuesday, December 24.

Carraro India has allotted 53.27 lakh equity shares to 33 funds at ₹704 apiece, which is also the upper end of the price band. This aggregates the transaction size to ₹375 crore. Aditya Birla Sun Life Mutual Fund (MF), HSBC MF, UTI MF, Sundaram MF, Motilal Oswal MF, Kotak Mahindra Life Insurance Company, Bajaj Allianz Life Insurance Company, Tata AIA Life Insurance Company and SBI General Insurance Company are among anchor investors.

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Carraro India IPO Details

Carraro India’s IPO is completely an offer for sale (OFS) of shares worth ₹1,250 crore by Carraro International SE, with no fresh issue component. The issue, with a price band of ₹668-704 per share for its initial share sale, will open for public subscription December 20 and conclude on December 24.

Since the entire issue is an OFS, all the proceeds from the IPO will go directly to the selling shareholder. Half of the issue has been reserved for qualified institutional buyers, 35 per cent for retail investors, and the remaining 15 per cent for non-institutional investors. Axis Capital Ltd, BNP Paribas, and Nuvama Wealth Management Ltd are the book-running lead managers to the issue.

The floor price and the cap price are 66.80 times and 70.40 times the face value of the equity shares respectively. The price to earnings ratio based on diluted EPS for fiscal 2024 at the upper end of the price band is 64 times as compared to the average industry peer group PE ratio of 55.80 times.

Also Read: Carraro India IPO: Price band set at ₹668-704 per share; check key dates, issue details, more

Tentatively, Carraro India IPO basis of allotment of shares will be finalised on Thursday, December 26, and the company will initiate refunds on Friday, December 27, while the shares will be credited to the demat account of allottees on the same day following refund. Carraro India share price is likely to be listed on BSE and NSE on Monday, December 30.

Carraro India Company Details

Carraro India manufactures the transmission systems for off-highway vehicles and other agricultural and construction equipment. Founded in 1997, Carraro India, a subsidiary of Carraro S.p.A, began its manufacturing journey with transmission systems in 1999 and axles in 2000.

The company started its operations using IP rights licensed from other entities within the Carraro Group and specialises in complex engineering products and solutions for original equipment manufacturer (OEM) customers. It serves as an independent tier-1 provider, concentrating on axles and transmission systems for agricultural tractors and construction vehicles.

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Carraro India operates two manufacturing plants in Pune — one for drivelines and the other for gears. These plants are equipped with advanced technologies for casting, machining, assembly, prototyping, testing, painting, and heat treatment.

As per the red herring prospectus (RHP), the company’s listed peers are Escorts Kubota (with a P/E of 43.21), Schaeffler India (with a P/E of 74.22), Sona BLW Precision Forgings (with a P/E of 76.93), Ramakrishna Forgings (with a P/E of 42.82), Happy Forgings (with a P/E of 47.08), and Action Construction Equipment (with a P/E of 50.56).

As of September 2024, the company supplied its products to 38 manufacturers in India and six internationally. Its key customers include large domestic and international OEMs. It exports to customers in Asia directly and indirectly, and outside Asia through Carraro Drive Tech Italia.

The key clients in the agricultural tractor sector include CNH, TAFE, Mahindra and Mahindra, John Deere India Pvt Ltd, Escorts Kubota, Action Construction Ltd, and International Tractors Ltd. In the construction vehicle sector, it serves CNH, Bull Machines, Liugong, Manitou Equipment, Doosan, Escorts Kubota, Mahindra and Mahindra, and Action Construction Ltd.

On the financial front, the company’s revenue from operations grew 4.44 per cent to ₹1,770.45 crore in FY24 from ₹1,695.12 crore in FY23, while profit after tax rose 29.44 per cent to ₹60.58 crore in FY24 from ₹46.80 crore in FY23.