Indo Farm Equipment files DRHP to raise funds via IPO

5 Oct 2023 , 08:23 AM

Chandigarh-based Indo Farm Equipment has set its sights on the capital market as it recently filed draft papers with the Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO). The IPO plan consists of issuing 1.4 crore equity shares, which includes a fresh issue of 1.05 crore equity shares by the company and an offer-for-sale of 35 lakh shares by the promoter Ranbir Singh Khadwali, as per the preliminary papers submitted to SEBI on September 28.

This IPO offering will represent 29.14 percent of the fully diluted post-offer paid-up equity share capital of Indo Farm Equipment. Before finalizing the red herring prospectus with the Registrar of Companies (ROC), the company is also considering a pre-IPO placement of up to 19 lakh equity shares. If the pre-IPO placement is executed, the number of equity shares issued in the pre-IPO placement will be adjusted from the fresh issue.

While the exact size of the IPO has not been disclosed, Indo Farm Equipment plans to utilize a significant portion of the fresh issue proceeds, which amount to Rs 175.6 crore, for several strategic purposes. This includes setting up a new dedicated unit to expand the manufacturing capacity of pick & carry cranes, repaying debts, and investing in its NBFC subsidiary, Barota Finance. This investment is aimed at strengthening the subsidiary’s capital base to meet future capital requirements effectively.

Indo Farm Equipment operates out of a facility located in Baddi, Himachal Pradesh. Over the past three fiscal years, the company’s sales have been composed of 90 percent domestic sales and 10 percent export sales. Its financial performance has shown improvement, with profits surging from Rs 137.2 crore in FY22 to Rs 155.64 crore in the fiscal year ending March FY23. Additionally, the company’s revenue from operations increased to Rs 370.76 crore, up from Rs 352.08 crore over the same period.

For this IPO, Aryaman Financial Services will serve as the book running lead manager, while MAS Services has been appointed as the registrar for the offer.