Carraro India IPO to open on Dec 20 with price band of Rs 668-774 per share

Carraro India Ltd, the manufacturer of transmission systems for off-highway vehicles and other agricultural and construction equipment, on Tuesday fixed a price band of Rs 668-774 per share of its Rs 1,250-crore initial public offering (IPO) that will open for subscription on December 20.

The Pune-based company's initial share-sale will conclude on December 24 and the anchor bidding will open for a day on December 19, the company said.

Carraro India's IPO is completely an offer for sale (OFS) of shares worth Rs 1,250 crore by Carraro International S E, with no fresh issue component, according to the red herring prospectus.

Since the entire issue is an OFS, all the proceeds from the IPO will go directly to the selling shareholder, rather than the company.

Founded in 1997, Carraro India, a subsidiary of Carraro S.p.A, began its manufacturing journey with transmission systems in 1999 and axles in 2000.

The company started its operations using IP rights licensed from other entities within the Carraro Group and specialises in complex engineering products and solutions for original equipment manufacturer (OEM) customers.

It serves as an independent tier-1 provider, concentrating on axles and transmission systems for agricultural tractors and construction vehicles.

Carraro India operates two manufacturing plants in Pune -- one for drivelines and the other for gears. These plants are equipped with advanced technologies for casting, machining, assembly, prototyping, testing, painting, and heat treatment.

As of September 2024, the company supplied its products to 38 manufacturers in India and six internationally.

Its key customers include large domestic and international OEMs. It exports to customers in Asia directly and indirectly, as well as to customers outside of Asia through Carraro Drive Tech Italia S.p.A.

Its key clients in the agricultural tractor sector include CNH, TAFE, Mahindra and Mahindra, John Deere India Pvt Ltd, Escorts Kubota, Action Construction Ltd, and International Tractors Ltd.

In the construction vehicle sector, it serves CNH, Bull Machines, Liugong, Manitou Equipment, Doosan, Escorts Kubota, Mahindra and Mahindra, and Action Construction Ltd.

On the financial front, the company's revenue from operations grew 4.44 per cent to Rs 1,770.45 crore in FY24 from Rs 1,695.12 crore in FY23, while profit after tax rose 29.44 per cent to Rs 60.58 crore in FY24 from Rs 46.80 crore in FY23.

Half of the issue has been reserved for qualified institutional buyers, 35 per cent for retail investors, and the remaining 15 per cent for non-institutional investors.

Axis Capital Ltd, BNP Paribas, and Nuvama Wealth Management Ltd are the book-running lead managers to the issue.