| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 204 to ₹ 215 | 69 | 31st Dec, 2024 – 02nd Jan, 2025 | ₹ 260.15 Cr |
About Indo Farm Equipment Limited IPO
Established in 1994, Indo Farm Equipment Ltd. is a fully integrated manufacturer specializing in tractors and Pick & Carry Cranes. The company also produces other agricultural equipment, including harvester combines, rotavators, and related spare parts, though these do not contribute significantly to its overall revenue. After its incorporation in October 1994, the company acquired a land to establish a manufacturing facility for tractors, tillers, and harvesters. The company began production in 2000 after it acquired engine technology. Initially, the company imported fully assembled engines but gradually indigenized and upgraded them to comply with India’s evolving emission standards. In 2006, the company set up an in-house captive foundry and added Pick & Carry Cranes to its portfolio the following year. In 2017, Indo Farm launched its own NBFC to provide retail financing for its tractors, enhancing financial accessibility for its customers. The company’s manufacturing facility, located in Baddi, Himachal Pradesh, spans 127,840 sq. mtrs. of industrial land and includes a captive foundry, machine shop, fabrication units, and assembly lines for tractors, cranes, and other equipment. The facility, certified with ISO 9001:2015, has advanced machinery and technology. Indo Farm produces tractors ranging from 16 HP to 110 HP and Pick & Carry Cranes with lifting capacities from 9 tons to 30 tons. As of September 30, 2024, the company has an annual manufacturing capacity of 12,000 tractors and 1,280 Pick & Carry Cranes. With the acquisition of additional land, the company is set to increase its crane production capacity by 3,600 units annually. Indo Farm exports its products to multiple countries, accounting for 7% of total sales, while its domestic distribution network spans 175 dealers across states like Punjab, Haryana, Uttar Pradesh, Maharashtra, Gujarat, and Rajasthan. Over the years, Indo Farm has built a fully integrated ecosystem, ensuring high-quality products and comprehensive financial support for its customers.
Objective of the Indo Farm Equipment Limited IPO
The objects of the net fresh issue is to raise funds for:
- Setting up new dedicated unit for expansion of its Pick & Carry Cranes manufacturing capacity;
- Repayment or pre-payment, in full or part, of certain borrowings availed by the company;
- Further investment in its NBFC subsidiary (Barota Finance Ltd.) for financing the augmentation of its capital base to meet its future capital requirements; and
- General corporate purposes.
Rationale To Indo Farm Equipment Limited IPO
Efficient and integrated manufacturing setup provides a competitive advantage
Indo Farm’s ISO 9001:2015-certified manufacturing facilities are located on 127,840 sq. mtrs of industrial land in Baddi, Himachal Pradesh. These facilities include a captive foundry unit, a dedicated machine shop, and fabrication and assembly units for Tractors and Pick & Carry Cranes. The facilities are equipped with advanced infrastructure, including induction furnaces, pneumatic molding machines, an automatic molding line, a sand plant, a fully equipped metallurgy and sand testing laboratory, machining centers, a gear shop, a hydraulic shop, a sheet metal and press shop, a fabrication shop, a paint shop, assembly units, and quality and utility rooms. The company’s integrated operations enable in-house manufacturing of critical components, reducing reliance on third-party suppliers and streamlining the production process. Over 330 components used in making a tractor and over 190 components used in making cranes are manufactured in-house by the company, enabling it to maintain control over the entire manufacturing process and providing better delivery timelines to its customers at a more competitive cost in both segments. The company’s R&D center, equipped with updated technology, is staffed with specialist engineers and develops customized solutions to meet diverse customer needs. This backward integration supports the production of a diverse range of series and variants, helping Indo Farm cater to its customers with flexibility and efficiency.
Diverse product range and global footprint offers growth potential
Indo Farm offers a diverse range of tractors, from 16 HP to 110 HP, in both 2WD and 4WD configurations, which meet approximately 80% of global market requirements, particularly for 4WD tractors. The 65, 75, 90, and 110 HP models are developed for export markets such as Africa, Latin America, the Middle East, and Central and South East Asia. The 1,026 (26 HP) tractor has been developed and homologated specially for the European market. Exports account for around 7% of the company’s total sales. However, its extensive product acceptance across numerous countries underscores an impressive international footprint and highlights its ability to deliver world-class products and reliable after-sales services at competitive prices. Currently, Indo Farm’s global presence spans various countries, including Afghanistan, Algeria, Bangladesh, Belgium, Bhutan, Brazil, Chile, Ethiopia, Gabon, Germany, Ghana, Hungary, Italy, Japan, Jordan, Kenya, Kuwait, Lebanon, Malawi, Mauritius, Mexico, Myanmar, Namibia, Nepal, the Netherlands, Nigeria, Oman, Poland, Saudi Arabia, Spain, Sudan, Syria, Tanzania, the United Kingdom, Uruguay, Uganda, Yemen, and Zimbabwe, among others. The company also manufactures Pick & Carry Cranes with capacities ranging from 9 to 30 tons, available in 2WD and 4WD variants. These cranes are widely utilized in the engineering, construction, and infrastructure sectors and are recognized for their safety, quality, operator productivity, innovative features, and competitive total cost of ownership. With an established portfolio of diverse, globally accepted products and a robust operational setup, Indo Farm is well-positioned to scale rapidly and capitalize on emerging opportunities in international and domestic markets.
Valuation of Indo Farm Equipment Limited IPO
Indo Farm Equipment, with over two decades of experience, is a fully integrated and established manufacturer of Tractors & Pick & Carry Cranes. The company also produces ancillary farm equipment such as harvester combines, rotavators, and related spare parts, although these do not significantly contribute to its total revenue. In addition, Indo Farm operates an asset financing business through its wholly owned subsidiary, Barota Finance Ltd., an RBI-registered NBFC. The mobile crane market is expected to grow to USD 29.1 billion, at a CAGR of 6.65%, during the 2024-29 period, while the global tractor market is projected to reach USD 114.5 billion, growing at a CAGR of 5.90% during the same period. The global agricultural equipment market is estimated to reach USD 296.61 billion, growing at a CAGR of 7.3% from 2023 to 2029. Indo Farm’s fully integrated manufacturing facilities enhance product efficiency and ensure timely delivery to its customers. The company’s diverse tractor range meets around 80% of global market requirements, while its Pick & Carry Cranes are widely utilized in infrastructure development. Additionally, the company’s investment in its subsidiary NBFC is expected to drive tractor sales by facilitating easier financing options. Indo Farm also plans to expand its dealer network from 175 to 500 dealers over the next five years. Financially, Indo Farm has maintained a profitable track record and consistent performance. It reported a PAT of Rs. 155.95 million, Rs. 153.72 million, and Rs. 137.19 million in FY24, FY23, and FY22, respectively, and has consistently achieved EBITDA margins of 16.63%, 15.79%, and 14.77% during the same periods. The issue is priced at a P/E ratio of 51.8x on the upper price band, based on FY24 earnings, which is relatively high compared to its peers. However, given the company’s improving sales, growth-oriented investment in its NBFC, and favorable industry trends, we recommend a “SUBSCRIBE” rating for the issue.
What is the Indo Farm Equipment Limited IPO?
Indo Farm Equipment IPO is a book built issue of Rs 260.15 crores. The issue is a combination of fresh issue of 0.86 crore shares aggregating to Rs 184.90 crores and offer for sale of 0.35 crore shares aggregating to Rs 75.25 crores. Login to your account now.
How to apply for the Indo Farm Equipment Limited IPO through StoxBox?
To apply for the Indo Farm Equipment Limited IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Indo Farm Equipment Limited IPO open?
Indo Farm Equipment Limited IPO is opening on 31th December 2024.. Apply Now
What is the lot size of the Indo Farm Equipment Limited IPO?
The Lot Size of Indo Farm Equipment Limited IPO is 69 equity shares . Login to your account now
When is the Indo Farm Equipment Limited IPO allotment date?
The allotment Date for Indo Farm Equipment Limited IPO is 03rd January 2025. Login to your account now.
When is the Indo Farm Equipment Limited IPO listing date?
The listing Date for Indo Farm Equipment Limited IPO is 07th January 2025. Login to your account now
What is the minimum investment required for the Indo Farm Equipment Limited IPO?
In the Retail segment the minimum investment required is Rs. 14,835. Login to your account now
What is the maximum investment allowed for the Indo Farm Equipment Limited IPO?
In the Retail segment the maximum investment requirement is Rs. 192,855 . Login to your account now
What are the risks associated with investing in the Indo Farm Equipment Limited IPO?
- The company’s average capacity utilization was 32% for tractors and 87% for cranes from FY22 to FY24. Under-utilization or the inability to effectively utilize its existing and expanded manufacturing facilities could adversely affect its business, future prospects and financial performance.
- The company’s manufacturing facility is geographically concentrated in Himachal Pradesh, which may restrict its operations and affect the business and financial conditions.
- The company’s ability to sell tractors depends heavily on financing support from banks, NBFCs, and its subsidiary NBFC, which exposes the company to risks related to financing availability, regulatory compliance, and operational performance of its subsidiary NBFC.
When will the Indo Farm Equipment Limited IPO shares be credited to my Demat account?
The Indo Farm Equipment Limited IPO be credited to the account on allotment date which is 06th January 2025. Login to your account now
Where can I find the Indo Farm Equipment Limited IPO prospectus?
The prospectus of Indo Farm Equipment Limited IPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related to Indo Farm Equipment Limited IPO?
| IPO Open Date | Tuesday, December 31, 2024 |
| IPO Close Date | Thursday, January 2, 2025 |
| Basis of Allotment | Friday, January 3, 2025 |
| Initiation of Refunds | Monday, January 6, 2025 |
| Credit of Shares to Demat | Monday, January 6, 2025 |
| Listing Date | Tuesday, January 7, 2025 |
| Cut-off time for UPI mandate confirmation | 5 PM on January 2, 2025 |
