Indo Farm Equipment IPO Day 3: Subscription, GMP, and Key Updates
Indo Farm Equipment Ltd, a prominent manufacturer of tractors and agricultural machinery, launched its Initial Public Offering (IPO) on December 31, 2024. The subscription window is set to close today, January 2, 2025. The IPO has garnered significant attention from investors across all categories.
Subscription Status
As of the end of Day 2, the IPO was oversubscribed by 54.50 times, with bids for 46.16 crore equity shares against the 84.70 lakh shares on offer. The breakdown is as follows:
Qualified Institutional Buyers (QIBs): Subscribed 11.96 times
Non-Institutional Investors (NIIs): Subscribed 131.78 times
Retail Individual Investors (RIIs): Subscribed 45.70 times
Price Band and Lot Size
The price band for the IPO is set between ₹204 and ₹215 per equity share, with a lot size of 69 shares. At the upper end of the price band, the company aims to raise ₹260.15 crore, comprising a fresh issue of 86 lakh equity shares worth ₹184.90 crore and an offer-for-sale of 35 lakh shares amounting to ₹75.25 crore.
Grey Market Premium (GMP)
The grey market has shown a positive response, with shares trading at a premium of ₹90 over the upper price band of ₹215, indicating a potential listing price of ₹305 per share. This suggests an approximate 42% gain over the issue price.
Key Dates
IPO Closing Date: January 2, 2025
Allotment Finalization: January 3, 2025
Refunds Initiation: January 6, 2025
Shares Credited to Demat Accounts: January 6, 2025
Listing Date: January 7, 2025
Company Overview
Established in 1994, Indo Farm Equipment Ltd is a fully integrated manufacturer of tractors ranging from 16 HP to 110 HP, pick-and-carry cranes from 9 tons to 30 tons, and other farm equipment such as harvester combines and rotovators. The company exports its products to various countries and has a strong presence in the domestic market.
Investor Considerations
Brokerages have given mixed reviews. BP Wealth has assigned a "Subscribe" rating, citing the company's improving sales and growth-oriented investments. Anand Rathi recommends a "Subscribe for Long Term" rating, highlighting the company's traditional business value and well-planned capacity expansion. However, investors should note that 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.
Conclusion
The Indo Farm Equipment IPO has attracted substantial interest from investors, as evidenced by the high subscription rates and grey market premium. Potential investors should carefully consider the company's financials, market position, and the current valuation before making investment decisions.