10 Must-Know Facts About Indo Farm Equipment IPO 2024
Indo Farm Equipment Limited, a prominent manufacturer of agricultural and construction equipment, is launching its ₹260.15 crore Initial Public Offering (IPO) from December 31, 2024, to January 2, 2025. Known for its innovative machinery and strong market presence, the company offers an interesting investment opportunity for those looking to tap into the industrial and agricultural sectors.
Here are 10 essential things to consider before investing in the Indo Farm Equipment Limited IPO:
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Why is Indo Farm Equipment Limited a valuable investment opportunity?
Indo Farm Equipment Limited has built a solid reputation for producing reliable tractors (16 HP to 110 HP) and pick-and-carry cranes (9 to 30 tons). The company operates under two distinct brands, Indo Farm and Indo Power, and caters to global markets, including Nepal, Syria, Sudan, Bangladesh, and Myanmar. With an annual production capacity of 12,000 tractors and 720 cranes, Indo Farm is also planning to enhance its capabilities by setting up a new manufacturing unit, which will add 3,600 units to its production annually.
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What are the IPO dates, price range, and issue size?
Here’s a quick snapshot of the IPO details:
- IPO Dates: December 31, 2024 – January 2, 2025
- Listing Date: January 7, 2025
- Price Range: ₹204–₹215 per share
- Total Issue Size: ₹260.15 Cr
- Face Value: ₹10 per share
- Exchanges: BSE, NSE
- Lot Size: 69 shares
- Promoters: Ranbir Singh Khadwalia and Sunita Saini
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What is the minimum investment amount?
The minimum investment required to apply for the Indo Farm Equipment Limited IPO is ₹14,076, based on the lot size of 69 shares at the lower price band of ₹204 per share. However, to increase your chances of allotment, we recommend applying at the upper price band, which would require ₹14,835 (69 shares at ₹215 per share).
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What does the company do?
Established in 1994, Indo Farm Equipment Limited focuses on designing and manufacturing agricultural and construction equipment.
- Key Products: Tractors, cranes, and harvesting equipment.
- Operations: The company operates from Baddi, Himachal Pradesh, and has a significant presence across Asia and Africa.
- Facilities: The company’s production units include a foundry, machine shop, and assembly lines, enabling seamless production under one roof.
To meet growing demand, Indo Farm has acquired additional land near its existing facility for a new crane manufacturing unit.
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What are the IPO’s objectives?
The funds raised through this IPO will be used for:
- Building a new facility to increase crane production capacity.
- Repaying or prepaying specific loans.
- Enhancing the capital base of its NBFC subsidiary, Barota Finance Ltd., to support future growth.
- General corporate purposes.
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What is the allocation structure for investors?
The shares will be allocated as follows:
- Qualified Institutional Buyers (QIBs): Up to 50%
- Non-Institutional Investors (NIIs): At least 15%
- Retail Investors: At least 35%
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What are the key strengths and Risks?
Strengths:
- Fully integrated manufacturing operations for tractors and cranes.
- Experienced leadership team driving the company’s growth.
- Financial arm (NBFC) to support customers and partners.
- Diverse product portfolio with a presence in multiple countries.
- Plans to expand manufacturing capacity significantly.
Risks:
- Ongoing legal cases involving the company, its management, and subsidiaries.
- Dependency on timely permissions for expansion projects.
- Lack of long-term contracts with raw material suppliers, which may affect pricing or availability.
- Delays in equipment delivery from vendors could increase costs and impact operations.
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What is the financial performance of Indo Farm Equipment Limited?
The company has demonstrated stable growth (₹ Cr):
| Period Ended | 31 Mar 2023 | 31 Mar 2022 | 31 Mar 2021 |
| Assets | ₹647.95 | ₹622.84 | ₹619.83 |
| Revenue | ₹375.95 | ₹371.82 | ₹352.61 |
| Net Profit | ₹15.60 | ₹15.37 | ₹13.72 |
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What is the allotment and listing timeline?
- Basis of Allotment: January 3, 2025
- Refund Initiation: January 6, 2025
- Shares Credited to Demat Accounts: January 6, 2025
- Listing Date: January 7, 2025
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Should you consider investing in this IPO?
Indo Farm Equipment Limited has a strong market presence, experienced leadership, and plans for significant capacity expansion, making it an attractive investment. However, potential investors should consider risks like legal proceedings, dependency on suppliers, and expansion-related delays before making a decision. Assess your investment goals and risk appetite carefully before applying.
Industry Peers:
The company’s competitors include leading names like Escorts Kubota Limited and Action Construction Equipment Limited.
By participating in the Indo Farm Equipment Limited IPO, you could gain exposure to a company poised for growth in the industrial and agricultural equipment sectors. Make an informed decision to diversify your investment portfolio!
