Indo Farm Equipment IPO Update: Day 3 Highlights
Everything You Need to Know – GMP, Subscription Status, Allotment, and Listing Dates!

Indo Farm Equipment IPO Update: Day 3 Highlights

Indo Farm Equipment Limited, a prominent manufacturer of tractors and cranes, recently concluded its Initial Public Offering (IPO) on January 2, 2025.Here’s a concise overview of the key aspects of the IPO, including subscription status, Grey Market Premium (GMP), allotment, listing dates, and considerations for potential investors.

Subscription Status

The IPO received an overwhelming response, with an overall subscription of 227.57 times. Breaking it down:

• Retail Individual Investors (RIIs): Subscribed 91.91 times.
• Non-Institutional Investors (NIIs): Subscribed 470.23 times.
• Qualified Institutional Buyers (QIBs): Subscribed 184.48 times.

This high level of subscription indicates strong investor confidence in the company’s prospects.

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As of January 2, 2025, the shares of Indo Farm Equipment were trading at a GMP of ₹96. This suggests a potential listing price of approximately ₹311 per share (considering the upper IPO price band of ₹215), indicating a premium of about 45%. It’s important to note that GMP is an informal indicator and may not always accurately predict the actual listing performance.

Allotment and Listing Dates

• Allotment Date: January 3, 2025.
• Refunds Initiation: January 6, 2025.
• Credit to Demat Accounts: January 6, 2025.
• Listing Date: January 7, 2025.

Investors can check their allotment status through the official registrar’s website or the BSE/NSE platforms.

Company Overview

Established in 1994, Indo Farm Equipment Limited is engaged in the production of tractors ranging from 16 HP to 110 HP and pick-and-carry cranes with capacities from 9 to 30 tons. The company operates a manufacturing facility in Baddi, Himachal Pradesh, with an annual capacity of 12,000 tractors and 720 cranes. Additionally, Indo Farm exports its products to countries including Nepal, Syria, Sudan, Bangladesh, and Myanmar.

Financials and Valuation

The IPO was priced at a Price-to-Earnings (P/E) ratio of 51.8x based on FY24 earnings, which is relatively high compared to industry peers. However, analysts have noted the company’s improving sales, strategic investments in its Non-Banking Financial Company (NBFC) subsidiary, and favourable industry trends as positive factors.

Analyst Recommendations

• Reliance Securities: Assigned a ‘Subscribe’ rating, citing the company’s strong position in its operating segments, capacity expansions, and experienced management.
• Anand Rathi: Recommended ‘Subscribe for Long Term,’ highlighting the company’s traditional business values, experienced promoters, and well-planned capacity expansion.
• BP Wealth: Issued a ‘Subscribe’ rating, acknowledging the high valuation but emphasizing the company’s growth prospects and favourable industry dynamics.

Considerations for Investors

While the strong subscription numbers and positive GMP suggest robust demand and potential listing gains, investors should consider the following:

• High Valuation: The P/E ratio is on the higher side, which may imply limited upside potential in the short term.
• Market Volatility: Stock market conditions can change rapidly, affecting the stock’s performance post-listing.
• Long-Term Prospects: The company’s plans for capacity expansion and investment in its NBFC arm indicate a focus on long-term growth.

Conclusion

Indo Farm Equipment’s IPO has garnered significant interest from various investor categories, reflecting confidence in the company’s business model and growth plans. However, potential investors should carefully assess the high valuation and consider their investment horizon and risk tolerance before making a decision. Consulting with a financial advisor is recommended to align this investment with individual financial goals and risk profiles.