Indo Farm Equipment IPO: From key dates to risks — here are 10 things to know from RHP | Stock Market News

Indo Farm Equipment IPO: The Chandigarh-based farm equipment manufacturer Indo Farm Equipment is set to launch its initial public offering (IPO) next week in the price band of ₹204 to ₹215 per share. At the upper end of the price band, the company is looking to raise ₹260.15 crore.

The investors can apply for the IPO for a minimum of 69 shares in one lot and its multiples thereafter.

As of December 26, the grey market premium (GMP) for Indo Farm Equipment public issue was at ₹85 per share. At the upper price band of ₹215, the shares are expected to list at ₹300, a premium of 39.53 per cent, according to data collected from Investorgain.com. Grey market premium indicates the investors’ willingness to pay more for a public issue. 

Here are 10 things to know from Indo Farm Equipment’s RHP

1. Indo Farm Equipment IPO Key Dates: The public issue is poised to open for subscription on Tuesday, December 31 and close on Thursday, January 2.

The anchor round for the issue will be held on Monday, December 30.

The allotment for the public issue is expected to be finalised on Friday, January 3. The Indo Farm Equipment IPO is expected to be listed on the domestic stock markets on Tuesday, January 7, 2025.

2. Indo Farm Equipment IPO Offer Type: The IPO is a combination of a fresh issue of 86 lakh equity shares and an offer for sale (OFS) of 35 lakh shares. 

3. Indo Farm Equipment OFS participant: Promoter Ranbir Singh Khadwalia is selling up to 35 lakh equity shares of the company at a face value of ₹10 per share via the OFS segment.

4. Indo Farm Equipment IPO Peers: As per the company’s RHP, Escorts Kubota and Action Construction Equipment are its listed peers in the market.

5. Indo Farm Equipment IPO Reservation: As per the company’s RHP filing with SEBI, not more than 50 per cent of the net issue will be offered to Qualified Institutional Buyers (QIBs), not less than 15 per cent will be offered to the Non-Institutional Investors (NIIs), and not less than 35 per cent of the net issue is reserved for the retail bidders.

6. Indo Farm Equipment’s Objective: The company aims to use ₹50 crore of the net proceeds from the public issue for repayment or prepayment, in parts or in full, of certain company borrowings. Along with that, the company also aims to use ₹70.07 crore for the expansion of its pick and carry crane manufacturing capacity.

Apart from this, the company plans on investing ₹45 crore into its non-banking financial company (NBFC) subsidiary, Barota Finance Ltd., to finance its capital base to meet the non-banking lenders’ future capital needs. The remaining amount raised from the stock markets will be used for general corporate purposes, as per the RHP filing. 

7. Indo Farm Equipment Business Overview: As of the financial year ended March 2024, the company disclosed that 52.16 per cent of the total revenue from the sale of products comes from its Tractor segments, followed by the Pick and Carry Cranes segment at 47.77 per cent, and the remaining 0.07 per cent is from other income.

The company also operates its non-lending arm, Barota Finance Limited, which is recognised and licensed by the Reserve Bank of India (RBI).

8. Indo Farm Equipment IPO Book-runners: Aryaman Financial Services Limited is the book-running manager of the public issue, while MAS Services Limited is the registrar of the offer.

9: Indo Farm Equipment IPO Company Financials: For the first three months of the financial year 2024-25, the company made a net profit of ₹24.54 crore. Along with the net profit, the company’s total income stood at ₹755.38 crore, as per the RHP filing. 

10: Indo Farm Equipment IPO Key Risks: Any reduction of demand, manufacturing, financing support from the banks, seasonal issues, etc., in the major two segments can adversely hamper the company’s business. 

The overall growth of the company in the last three financial years has been low, as the profit margins have increased marginally in the last three years. The profit margin for April to July FY2025 was at 3.17 per cent. Meanwhile, it was 4.16 per cent in FY24, 4.15 per cent in FY23, and 3.90 per cent in FY22.

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