Indo Farm Equipment IPO GMP, listing forecast: What to expect on debut day?

The grey market premium (GMP) indicate a favorable debut for Indo Farm Equipment shares on the BSE and NSE, scheduled for Tuesday, January 7, 2025

As investors await the D-Street debut of Indo Farm Equipment shares on the bourses, the grey market premium (GMP) indicates a favorable debut for the company's shares on the BSE and NSE, scheduled for Tuesday, January 7, 2025. 

 

Ahead of the listing, the unlisted shares of Indo Farm Equipment, whose initial public offering (IPO) closed for subscription on Thursday, January 2, 2025, were quoted at Rs 305 apiece, reflecting a premium of Rs 90 or 41.86 per cent over the upper end of the IPO price of Rs 215, according to several sources tracking unofficial market activities. 

 

This upbeat sentiment comes on the heels of its highly oversubscribed IPO, which closed on January 2, 2025, showcasing strong investor demand and setting the stage for a promising market entry.

 

 

Despite the offer being slightly on the expensive side, Prashanth Tapse, senior VP (Research) at Mehta Equities, said that Indo Farm Equipment received an overwhelming response from various sets of investors. Particularly, the Non-Institutional Investor (NII) category bid for more than 500 times the category allotment, while the retail investors' portion saw an impressive 104 times subscription. Overall, the IPO was oversubscribed by 229.68 times, making it one of the highest-subscribed IPOs among the mainboard issues launched in 2024. 

Also Read: Leo Dry Fruits IPO allotment

 

Tapse attributes the massive demand to the company’s plans to use IPO proceeds to strengthen its dealer network, which could eventually lead to higher tractor sales in the future. Additionally, the company is expanding its pick-and-carry crane manufacturing capacities to meet rising demand, supported by a strong backward integration business model that enables higher Ebitda margins compared to peers. The company is also poised for growth in the agriculture and crane segments, driven by significant infrastructure spending by the government and private industries.

 

Considering the renewed market sentiment and massive subscription demand, Tapse expects the company to deliver strong listing gains of over 40 percent above its issue price. He believes this expected listing gain is justified, as investors anticipate healthy growth post-expansion of pick-and-carry crane capacities and an enhanced dealer network.

 

Tapse recommends conservative investors who have been allotted shares to book profits above expectations. For long-term investors, he advises holding the stock despite potential short-term volatility post-listing and market risks. For non-allotted investors, Tapse suggests accumulating the stock if it dips post-listing due to profit booking.

 

Indo Farm Equipment IPO details

The Rs 260 crore Indo Farm Equipment IPO was available for public subscription from Tuesday, December 31, 2024, to Thursday, January 2, 2025. The public offering consisted of a fresh issue of 86,00,000 equity shares and an offer for sale of 35,00,000 equity shares.

 

The Indo Farm Equipment IPO was priced in the band of Rs 204-215 per share, with a lot size of 69 shares. According to its Red Herring Prospectus (RHP), the company will not receive any proceeds from the offer for sale, as the promoter selling shareholders will be entitled to their respective portions of the proceeds after deducting offer-related expenses and relevant taxes.

 

The company plans to use the proceeds from the fresh issue to set up a new dedicated unit for expanding its Pick & Carry Cranes manufacturing capacity and to repay or pre-pay certain borrowings. Additionally, the company intends to invest in its NBFC subsidiary, Barota Finance, to enhance its capital base for future requirements and for general corporate purposes.

 

Mas Services is the registrar for the issue, while Aryaman Financial Services is the sole book running lead manager.

 

About Indo Farm Equipment

Indo Farm Equipment (IFEL) is a two-decade-old manufacturer of tractors and pick & carry cranes. Its production facilities are located in Baddi, Himachal Pradesh, with a capacity to manufacture 12,000 tractors and 1,280 pick & carry cranes annually. The company produces tractors ranging from 16 HP to 110 HP and pick & carry cranes ranging from 9 tons to 30 tons, along with other farm equipment.