Indo Farm Equipment, a leading manufacturer of tractors and pick-and-carry cranes, raised over Rs 78 crore from anchor investors on Monday, a day before opening its initial public offering (IPO) for public subscription. The IPO, set within a price band of Rs 204-215 per equity share, includes a fresh issue and an offer for sale (OFS). Proceeds from the fresh issue will support the company’s expansion plans, debt reduction, and investment in its NBFC subsidiary. This article delves into the key highlights of the IPO and its strategic implications for the company and investors.

Anchor Investors Commit Rs 78 Crore

Participation from Prominent Investors:
Indo Farm Equipment allotted 36.30 lakh shares to 11 anchor investors at Rs 215 per equity share, which is the upper limit of the price band. Notable participants included:

Negen Undiscovered Value Fund
Niveshaay Hedgehogs
Rajasthan Global Securities
Subham Capital
India Equity Fund I
Saint Capital Fund
Vikasa India EIF I Fund
Transaction Details:
The anchor allocation raised Rs 78.04 crore, representing a significant endorsement of investor confidence ahead of the IPO launch.

IPO Details and Price Band

Key Dates and Price Band:
The IPO opens for public subscription on December 31 and closes on January 2, 2024. The price band for the issue is set at Rs 204-215 per equity share.

IPO Size and Structure:
The Rs 260-crore IPO comprises:

Fresh Issue: 86 lakh equity shares
Offer for Sale (OFS): 35 lakh equity shares by promoter Ranbir Singh Khadwalia
Market Capitalisation:
At the upper price band, the IPO values Indo Farm Equipment at over Rs 1,000 crore.

Use of IPO Proceeds

Expansion of Manufacturing Capacity:
Proceeds will be used to establish a new dedicated unit to expand the company’s pick-and-carry cranes manufacturing capacity, enhancing its production capabilities.

Debt Reduction:
A portion of the funds will be allocated to repay existing debt, strengthening the company’s balance sheet and reducing financial leverage.

Investment in Barota Finance:
The company plans to channel funds into its NBFC subsidiary, Barota Finance, to augment its capital base and support future growth initiatives.

Business Overview and Market Position

Core Operations:
Indo Farm Equipment specializes in manufacturing tractors, pick-and-carry cranes, and other farm equipment, catering to diverse agricultural and industrial needs.

Growth Strategy:
The company’s strategic focus on expanding its crane manufacturing capacity underscores its ambition to capture a larger market share in the infrastructure and construction sectors.

IPO Allocation and Listing

Investor Segments:
The IPO allocation is structured as follows:

50% reserved for Qualified Institutional Buyers (QIBs)
35% reserved for Retail Investors
15% reserved for Non-Institutional Investors
Listing Platforms:
The equity shares will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

Lead Manager and Strategic Implications

Aryaman Financial Services:
As the sole book-running lead manager, Aryaman Financial Services is spearheading the IPO process, ensuring smooth execution and investor engagement.

Strategic Expansion and Valuation:
The IPO positions Indo Farm Equipment to strengthen its market standing, reduce financial liabilities, and scale its operations in key segments. The projected market capitalisation of over Rs 1,000 crore highlights the company’s robust growth potential.