The IPO of Kross Limited, which is trailer axle and suspension assembly manufacturing company, will be opening for subscription today, September 9. The IPO will remain open for bidding till September 11.
The company manufactures and supplies trailer axle and suspension assemblies and is a diversified player in the industry. Additionally, it provides a large selection of forged equipment for the farm equipment and medium- and heavy-duty commercial vehicle categories.
Around 50 per cent of the issue is reserved for QIB investors, not less than 35 per cent for retail investors and around 15 per cent for non-institutional investors (NII).
The company has had strong financial results recently; in the fiscal year 2024, net profit increased by 45.1% to ₹44.9 crore. In addition, revenue increased significantly by 27% to ₹620.3 crore from the previous year.
Brokerage firm SBI Securities, while giving ‘subscribe for long-term’ tag, says that the issue appears to be fairly valued given the healthy growth track record of the company. “We recommend subscribing to the issue for long term investment horizon,” the firm said in a note.
Meanwhile, Deven Choksey Research has assigned ‘subscribe’ rating to the Kross IPO, given the impressive growth metrics and competitive positioning, coupled with high return ratios compared to its peers.
“With a strong track record of financial performance and a commitment to innovation, Kross Limited stands to benefit from the ongoing demand for high-quality, safety-critical components. The company is expected to trade at an adjusted PE multiple of 34x at the upper price band. Given the impressive growth metrics and competitive positioning, coupled with high return ratios compared to its peers, we assign a ‘SUBSCRIBE’ rating for Kross Limited’s IPO,” the brokerage firm said.
The Kross IPO is a book-built issue valued at ₹500 crore. It comprises a fresh issue of 1.04 crore shares, amounting to ₹250 crore, and an offer for sale of an additional 1.04 crore shares, also totaling ₹250 crore.
The price band of the upcoming IPO has been fixed at ₹228 to ₹240 per share, with a face value of ₹5 per share.
The company plans to utilize the proceeds mainly for repaying loans and supporting future capital expenditures. Around ₹90 crore will be allocated for debt repayment, while ₹70 crore from the IPO will be used to finance capital investments, particularly for the purchase of machinery and equipment. Additionally, approximately ₹30 crore will be set aside for working capital requirements.
The allotment for the Kross IPO is expected to be completed on Thursday, September 12. The IPO is set to be listed on both the NSE and BSE, with a tentative listing date of Monday, September 16.
Equirus Capital Private Limited is the book-running lead manager for the Kross IPO, with Kfin Technologies Limited acting as the registrar for the offering.
The shares of Kross IPO is currently trading at a premium of ₹50, as per market investors. This means that the estimated listing price of the Kross IPO is likely to be ₹290, which is 20.83 per cent higher than the IPO price of ₹240.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
