Carraro India Limited is preparing to accelerate its market journey with a strategic initial public offering (IPO) that promises to be a pivotal moment for investors interested in the auto ancillary sector. The ₹1,250 crore offering represents a carefully orchestrated opportunity for market participants, with the public issue open for subscription from December 20 to December 24, 2024. Comprising an entirely fresh offer of 1.78 crore shares, the IPO signals the company's ambition to harness public market capital and drive future growth.
The offering has been meticulously designed to provide an accessible entry point for investors across different segments. With a precisely calibrated price band of ₹668 to ₹704 per share and a convenient lot size of 21 shares, the IPO creates a strategic investment opportunity. Retail investors can participate with a minimum investment of ₹14,784, opening the door to potentially capitalize on the company's growth trajectory. The administrative process has been streamlined, with share allotment anticipated on December 24, 2024, and expected listing on both the Bombay Stock Exchange and National Stock Exchange by December 30, 2024. This methodical approach reflects Carraro India Limited's commitment to transparency and investor-friendly practices, positioning the IPO as a compelling investment proposition in the dynamic auto ancillary landscape.
Carraro India Limited IPO is a fundraise worth ₹1,250 crores. It is entirely an offer for sale of 1.78 crore shares. The IPO will be available for subscription from December 20, 2024, to December 24, 2024, providing an opportunity for investors looking to gain a stake in the auto ancillary sector.
| Carraro India IPO Date | December 20, 2024 - December 24, 2024 |
| Price Band | ₹668 to ₹704 per share |
| Face Value | ₹10 per share |
| Lot Size | 21 shares |
| Issue Type | Book-built issue |
| Offer for Sale | 1,77,55,680 shares of ₹10 per share, amounting to ₹1,250 crores |
| Total Issue Size | 1,77,55,680 shares of ₹10 per share, amounting to ₹1,250 crores |
| Listing at | BSE, NSE |
| Share Holding Post Issue | 5,68,51,538 |
| Share Holding Pre Issue | 5,68,51,538 |
The Carraro India Limited IPO opens for subscription on December 20, 2024, and closes on December 24, 2024, with allotment slated for December 26, 2024.
| IPO Open Date | December 20, 2024 (Friday) |
| IPO Close Date | December 24, 2024 (Tuesday) |
| Basis of Allotment | December 26, 2024 (Thursday) |
| Initiation of Refunds | December 27, 2024 (Friday) |
| Credit of Shares to Demat Account | December 27, 2024 (Friday) |
| Listing Date on Exchanges | December 30, 2024 (Monday) |
| Cut-off Time for UPI Mandate Confirmation | 5 PM on December 24, 2024 (Tuesday) |
Carraro India Ltd, incorporated in 1997, specializes in manufacturing components ranging from small gears to complete tractors. The company designs, manufactures, and markets transmission systems, including axles, transmissions, and drives, catering primarily to off-highway vehicles in the agricultural and construction sectors. Its product portfolio also includes a wide range of gears for trucks, automotive, and industrial applications. Operating from two advanced manufacturing facilities in Pune, Maharashtra, the company’s driveline plant spans 84,000 square meters, while its gear manufacturing plant covers 78,000 square meters, equipped with state-of-the-art technologies such as casting, machining, assembly, and heat treatment.
Carraro India is a key player in agricultural tractor and construction vehicle components, producing axles and transmissions for tractors and gears for vehicles like backhoe loaders, cranes, and forklifts. The company has built a robust supplier network with 220 domestic partners across eight Indian states and 58 international suppliers. As of September 30, 2024, its quality and after-sales support is driven by a team of 140 employees, including both full-time and temporary staff, reflecting its focus on ensuring product excellence and customer satisfaction.
The proceeds from the Offer will not go to the Company; instead, they will be received by the Promoter Selling Shareholder after deducting Offer-related expenses and applicable taxes, which will also be borne by the Promoter Selling Shareholder.
The Carraro India Limited IPO showcases a healthy market capitalization of ₹4,002.35 crores as on March 31, 2024. Key performance indicators reflect the company's financial health, with a Return on Equity (RoE) of 17.69%, Return on Capital Employed (RoCE) of 19.35%, and Debt-to-Equity ratio of 0.58.
The Return on Net Worth (RoNW) stands at 16.92%, while the PAT Margin is 3.50. On an annual basis, the company's Profit After Tax (PAT) grew by 29% while the revenue increased by 4% in the financial year ending on March 31, 2024. A comparison of earnings per share (EPS) reveals a pre-IPO EPS of ₹11 while it is ₹17.50 post-IPO.
| Period Ended | September 30, 2024 | March 31, 2024 | March 31, 2023 | March 31, 2022 |
| Revenue | 922.74 | 1,806.55 | 1,733.30 | 1,520.05 |
| Assets | 1,093.41 | 1,072.89 | 1,072.39 | 1,012.44 |
| Profit After Tax | 49.73 | 62.56 | 48.46 | 22.43 |
| Net Worth | 419.44 | 369.82 | 337.38 | 292.49 |
| Total Borrowing | 195.78 | 212.55 | 188.33 | 178.14 |
Amount in ₹ crores
Carraro India excels as a Tier-1 supplier of transmission systems and axles, with a strong market position in India’s agricultural and construction vehicle sectors. Its diversified product portfolio caters to multiple industries, including agriculture, construction, and industrial vehicles, ensuring a broad revenue base. The company operates two technologically advanced manufacturing plants in Pune, featuring integrated capabilities such as casting, machining, assembly, and heat treatment, allowing for high production capacity and superior quality control. Robust R&D capabilities, backed by proprietary intellectual property, drive innovation and enable the development of future-ready products.
The company enjoys strong relationships with domestic and international OEM customers, contributing to a reliable revenue stream. A well-established supplier network, comprising 220 domestic and 58 global suppliers, ensures seamless procurement of raw materials. Carraro India’s experienced management team and synergy with the Carraro Group provide access to global expertise and best practices. Its consistent revenue and profit growth, coupled with operational efficiency, further highlight its resilience and growth potential in a competitive market.
Carraro India faces risks from economic cyclicality, as demand for off-highway vehicles depends heavily on agricultural and infrastructure growth, sectors prone to volatility. The company’s reliance on its top 10 customers, contributing 86.29% of revenue in FY2024, exposes it to revenue concentration risks. Additionally, 34.28% of its total revenue is tied to the Carraro Group, which could limit its operational independence. Intense competition from both domestic and global players adds pressure to maintain market share.
Raw material price volatility, especially in steel, poses a challenge to maintaining profit margins. Dependency on its Pune manufacturing facilities increases vulnerability to operational disruptions, which could severely impact production. Furthermore, exposure to foreign currency fluctuations and potential liabilities from hazardous industrial operations add layers of risk. The company also faces challenges in expanding its OEM customer base and mitigating risks associated with seasonal fluctuations in tractor demand.
The Carraro India Limited IPO presents a compelling opportunity for investors to gain exposure to the growing auto ancillary sector. This debut offers potential for high returns, but careful analysis is crucial. Evaluating the company's financial strength, competitive positioning, and growth strategy is essential to making an informed decision.
Investors should ensure the IPO aligns with their financial goals and risk appetite, transforming this promising opportunity into a well-considered investment. Comprehensive research and understanding of market dynamics will be key to leveraging this IPO strategically.
What is the Carraro India IPO?
The Carraro India Limited IPO is a main-board offering consisting entirely of an offer for sale of 1.78 crore equity shares with a face value of ₹10, aiming to raise a total of ₹1,250 crores. The share price is set between ₹668 and ₹704, with a minimum order quantity of 21 shares. This IPO will be open for subscription from December 20, 2024, to December 24, 2024. Link Intime India Private Limited is the registrar while Axis Bank Limited, BNP Paribas, Nuvama Wealth Management Limited are the book-running lead managers.
When will the Carraro India IPO open?
The Carraro India Limited IPO will open for subscription on December 20, 2024, and will close on December 24, 2024.
When is the Carraro India IPO listing date?
The tentative listing date for the Carraro India Limited IPO is Monday, December 30, 2024.
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