Kross files draft papers with Sebi to raise Rs 500 crore via IPO

4 Dec 2023 , 10:46 AM

In a significant move towards growth and expansion, Kross, a distinguished trailer axle and suspension assembly manufacturing company, has filed draft papers with the capital markets regulator to embark on an Initial Public Offering (IPO) with the goal of raising Rs 500 crore.

Offer Details: The IPO entails a strategic blend of a fresh issuance of shares amounting to Rs 250 crore by the company and an Offer-for-Sale (OFS) of shares worth Rs 250 crore by its promoters. Sudhir Rai and Anita Rai, the driving forces behind Kross, will be partaking in the OFS by selling shares worth Rs 168 crore and Rs 82 crore, respectively.

Potential Pre-IPO Placement: In an interesting turn, Kross is contemplating a pre-IPO placement to raise an additional Rs 50 crore. Should this pre-IPO placement materialize, the fresh issue size will be adjusted accordingly.

Utilization of Funds: The net fresh issue proceeds are earmarked for strategic purposes, including the acquisition of machinery and equipment (Rs 70 crore) and addressing working capital requirements (Rs 30 crore). A portion of the funds will also be allocated towards debt repayment, amounting to Rs 90 crore, with the remaining funds set aside for general corporate purposes.

Financial Performance: Kross, a Jharkhand-based forged and machined components maker, has showcased robust financial performance in recent years. The profit surged impressively by 154.2 percent YoY to Rs 30.93 crore for the year ended March FY23, propelled by strong topline and operating numbers. Revenue from operations witnessed a substantial YoY growth of 64.3 percent, reaching Rs 488.6 crore during the same period. The EBITDA for the year surged by 95 percent to Rs 57.5 crore, accompanied by a margin expansion of 184 basis points at 11.77 percent.

In the first quarter of the current financial year (FY24), Kross continued its positive trajectory, reporting a profit of Rs 8 crore on revenue amounting to Rs 143.7 crore.

Market Presence and Partnerships: Catering to the Medium and Heavy Commercial Vehicle (M&HCV) and farm equipment segments, Kross has established enduring relationships with prominent Original Equipment Manufacturers (OEMs), including Ashok Leyland and Tata International DLT.

Merchant Banker and Future Prospects: Equirus Capital has been appointed as the merchant banker for the upcoming IPO, signifying a robust advisory role in navigating Kross through this transformative financial journey.

As Kross gears up for its IPO, investors can anticipate a compelling investment opportunity in a company that not only exhibits strong financial fundamentals but also operates in a sector poised for growth. Stay tuned for further developments as Kross accelerates towards a new chapter in its corporate narrative.