Indo Farm Equipment IPO receives over 17 times subscription on day 1: Details

The ₹260.15-crore Initial Public Offering (IPO) of Indo Farm Equipment Limited was oversubscribed by more than 17 times on its first day of bidding, which ended at 5 pm on Tuesday, December 31. The IPO comprises a fresh issue of 86 lakh equity shares and an offer-for-sale (OFS) component of 35 lakh shares. The price band for the IPO is set between ₹204 and ₹215 per share, and the shares are scheduled to be listed on the NSE and BSE on January 7, 2025.

Strong Demand Across Investor Categories

The IPO saw an overwhelming response, with bids placed for nearly 15 crore shares against the 84.7 lakh shares on offer, resulting in a total subscription of 17.7 times. Non-Institutional Investors (NIIs) led the way, placing bids for more than 5.18 crore shares against their allotted quota of 18.15 lakh shares, a subscription of 28.5 times. Retail investors also showed significant interest, bidding for 7.85 crore shares, resulting in an 18.5 times subscription. Qualified Institutional Buyers (QIBs) applied for 1.96 crore shares, subscribing 8.1 times to their reserved portion of 24.2 lakh shares.

Anchor Investor Mobilization

In the pre-bid phase, Indo Farm Equipment raised ₹78 crore from anchor investors. The company allotted 36.3 lakh shares to 11 fund schemes at ₹215 per share, the upper end of the price band. Key anchor investors include Negen Undiscovered Value Fund, Rajasthan Global Securities, Niveshaay Hedgehogs, and others.

IPO Breakdown and Use of Proceeds

The ₹260.15 crore IPO consists of a fresh issue of 86 lakh shares, expected to raise ₹184.9 crore, and an OFS component of 35 lakh shares, worth ₹75.25 crore. The company plans to utilize ₹71.1 crore of the proceeds to set up a new unit to expand the manufacturing capacity of Pick & Carry Cranes. Another ₹50 crore will be used for the repayment of borrowings, while ₹45 crore will be invested in its NBFC arm, Barota Finance Limited, to strengthen its capital base.

The minimum lot size for retail investors is 69 shares, requiring a minimum investment of ₹14,835.

Company Overview

Indo Farm Equipment is a major producer of tractors and pick-and-carry cranes, along with other farm equipment like harvester combines and rotavators. It exports products to countries including Bangladesh, Nepal, Myanmar, Sudan, and Syria, which contribute about 7% of its revenue. For FY24, the company reported a total income of ₹375.95 crore and a net profit of ₹15.6 crore, slightly up from ₹371.81 crore and ₹15.37 crore in the previous year.

The IPO is open for subscription until January 2, 2025. The allotment status will be finalized on January 3, and the refund process will begin on January 7, with shares credited to Demat accounts.