| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 228 to ₹ 240 | 62 | 09th Sep, 2024 – 11th Sepr, 2024 | ₹500.00 Cr |
About Kross Ltd IPO
Kross Ltd. is an auto ancillary player, engaged in the manufacturing and supply of trailer axle, suspension assembly and an extensive range of forged and precision machined high performance safety critical parts for M&HCV and farm equipment segment. With over three decades of experience, the company depends on its product development capabilities to design and deliver proprietary products. The company specializes in manufacturing of safety critical components for M&HCVs which include axle shafts, suspension linkages, bevel gears, rear end spindles and a wide variety of tractor components for hydraulic lift arrangement, power take-off shafts and front axle spindles. Kross boasts a diversified client base consisting of M&HCV and farm equipment OEMs and tier 1 suppliers to OEMs in the segment. The company has been able to maintain healthy relationships with large Indian OEMs including Ashok Leyland, an Indian farm equipment OEM and Tata International DLT. The company has also been able to attract new international customers such as Leax Falun AB and a Japan based OEM manufacturing commercial vehicles. Kross operates its five manufacturing facilities in Jamshedpur, Jharkhand, equipped with (i) forging presses and upsetters equipped with induction billet heaters, (ii) foundry with a high-pressure mould line, (iii) high-precision machining equipment, (iv) in-house cathodic electro-disposition plant, powder coating, spray painting and, (v) heat treatment furnaces and induction hardening equipment. The company has a manufacturing capacity of forged parts of upto 40 kg input weight. The company further plans to expand its existing capacity and improve its product offering range through expansion of its existing facilities.
Objective of the Kross Ltd IPO
The net proceeds from the fresh issue will be used towards the following purposes:
- Funding of capital expenditure requirements of the company towards purchase of machinery and equipment;
- Repayment or prepayment, in full or in part, of all or a portion of certain outstanding borrowings availed by the company, from banks and financial institutions;
- Funding working capital requirements of the company; and
- General corporate purposes.
Rationale To Invest In Kross Ltd IPO
Leveraging experience and technology for market expansion and efficiency
Over three decades of valuable experience have helped Kross to establish many long-standing relationships with customers. This strength of the company can largely be attributed to its ability to deliver customized offerings, as per the needs and requirements of its customers, in addition to the company’s track record of consistent delivery of quality and cost-effective products. Engaging with clients throughout the product development further helps the company to better understand the client’s requirement and helps in anticipating future plans of customers. This enables the company to forecast, plan and manufacture accordingly, aiding the company to achieve enhanced operational efficiency and improved productivity. Owing to the healthy track record of the company and diversified portfolio, the company is also able to steadily attract new customers including international customers. The company further plans to utilize a part of the offering to introduce technology for axle beam extrusion and seamless tube manufacturing. This technological advancement will provide a first-mover advantage, enhancing the company’s capability to serve its clients. Given the high demand for extrusion beams among OEMs, the company is well-positioned to benefit from this positive development.
Comprehensive integration strategy enhances operational efficiency and market position
The company has backward integrated with design, process engineering, forging, casting and machining capabilities which enables the company to ensure greater control over process, delivery timelines, quality and pricing. Such integration reduces the company’s dependence on third parties, improves production process and enhances operational efficiency. It further helps the company to capitalise on the upcoming trends. With the help of in-house facility, the company is able to meet customer requirement without relying on external vendors. This enables the company to closely monitor product quality, control production expenses, and plan delivery schedules. To further enhance the backward integration, the company aims to utilize a part of offering to further fund towards capex. The installation of new machinery and equipment will enable the company to increase its production capacity, scale operations, on board new customers, introduce new products, and better serve existing customers. Moreover, the company has also forward integrated with a network of sales and service location across key states in India for its trailer axles and suspension assemblies. On the back of such comprehensive integration, the company will be able to provide all round services to its customers, further strengthening its position in the market.
Valuation of Kross Ltd IPO
Kross Ltd. is a diversified player focused on manufacturing and supply of auto components for M&HCV and farm equipment segment. With over three decades of experience, Kross delivers customized, high-quality, and cost-effective products, fostering strong relationships with both domestic and international customers. The company’s comprehensive backward and forward integration enhances operational efficiency, quality control, and market responsiveness. The upcoming technological advancements in axle beam extrusion and seamless tube manufacturing are set to provide a first-mover advantage, further strengthening Kross’s market position. On the macro front, the growth in M&HCV and farm equipment segment will largely be driven by the country’s improving industrial activity, consistent agricultural activity & output, and government’s emphasis on industrial development. Moreover, with increasing focus on Atmanirbhar Bharat and various PLI schemes, Kross is well positioned to benefit from economical tailwinds. With the China +1 move working in favour of Indian OEMs, the company is well positioned to capitalise on such international opportunity as well, further enhancing the company’s geographical coverage. Financially, the company was able to grow its revenue from Rs. 2,975 million in FY22 to Rs. 6,203 million in FY24, indicating strong growth trajectory in its core business activity. EBITDA/PAT also rose from Rs. 240/122 million in FY22 to Rs. 808/449 million in FY24. The rising profitability highlights company’s ability to manage costs effectively. There was a noticeable hike in finance costs, but it didn’t seem to have a significant impact on the profitability of the company. The issue is valued at a P/E of 28.9x on the upper price band based on FY24 earnings, which is deemed to be fair. Therefore, we recommend a SUBSCRIBE rating for the issue.
What is the Kross Ltd IPO?
Kross IPO is a book built issue of Rs 500.00 crores. The issue is a combination of fresh issue of 1.04 crore shares aggregating to Rs 250.00 crores and offer for sale of 1.04 crore shares aggregating to Rs 250.00 crores. Login to your account now – https://campaign.StoxBox.in/redirect.html
How to apply for the Kross Ltd IPO through StoxBox?
To apply for the Kross Ltd IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Kross Ltd IPO open?
Kross LtdIPO is opening on 09th September 2024. Apply Now
What is the lot size of the Kross Ltd IPO?
The Lot Size of Kross Ltd IPO is 62 equity shares. Login to your account now – https://campaign.StoxBox.in/redirect.html
When is the Kross Ltd IPO allotment date?
The allotment Date for Kross Ltd IPO is 12th September 2024. Login to your account now – https://campaign.StoxBox.in/redirect.html
When is the Kross Ltd IPO listing date?
The listing Date for Kross Ltd IPO is 16th September 2024. Login to your account now – https://campaign.StoxBox.in/redirect.html
What is the minimum investment required for the Kross Ltd IPO?
In the Retail segment the minimum investment required is Rs. 14,880. Login to your account now – https://campaign.StoxBox.in/redirect.html
What is the maximum investment allowed for the Kross Ltd IPO?
In the Retail segment the maximum investment requirement is Rs. 193,440. Login to your account now – https://campaign.StoxBox.in/redirect.html
What are the risks associated with investing in the Kross Ltd IPO?
- Customer concentration risk – The company’s top five customers contributed a significant portion (more than 66.00% in each of the previous three Fiscals) of its revenues. The loss of a major customer or reduction in demand for its key products from any of its major customers may adversely affect the company’s business.
- Product concentration risk – Any reduction in demand for its key products on account of regulatory changes or changes in technologies including but not limited to shift in renewable/green energy would have a material adverse effect on its business and financial condition.
- Lack of long-term contracts – Kross does not have firm commitment agreements with its customers. If the customer chose not to source their requirements from the company, there may be a material adverse effect on its business.
- Product quality risk – The company is subject to strict quality requirements and any product defect issues or failure by the company to comply with quality standards could adversely affect its business and results of operations.
- Login to your account now – https://campaign.StoxBox.in/redirect.html
When will the Kross Ltd IPO shares be credited to my Demat account?
The Kross Ltd IPO be credited to the account on allotment date which is 13th September 2024. Login to your account now – https://campaign.StoxBox.in/redirect.html
Where can I find the Kross Ltd IPO prospectus?
The prospectus of Kross LtdIPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related to Kross Ltd IPO?
| IPO Open Date | Monday, September 9, 2024 |
|---|---|
| IPO Close Date | Wednesday, September 11, 2024 |
| Basis of Allotment | Thursday, September 12, 2024 |
| Initiation of Refunds | Friday, September 13, 2024 |
| Credit of Shares to Demat | Friday, September 13, 2024 |
| Listing Date | Monday, September 16, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on September 11, 2024 |
