Carraro India IPO: Date, Price, GMP and Details

Carraro India IPO - Complete Overview 

Carraro India IPO a Mainboard IPO is a book-built issue of Rs.1250 Cr (1,77,55,680 Shares) by Carraro India Limited that was incorporated in 1997 and has scaled the business to include the manufacture of components from the smallest gear to the complete tractor.

The company designs manufactures, and sells transmission systems (axles, transmissions, and drives) primarily to agricultural and construction equipment users for their off-highway vehicles. It also manufactures and develops a wide variety of gears for other domains, such as automotive, trucks agricultural, and construction.

One of the two manufacturing plants owned and operated by the company is in Pune, Maharashtra, India. The driveline manufacturing plant occupies a plot area of approx. 84,000 square meters and the gear manufacturing plant covers an area of approx. 78,000 square meters.

The driveline plant has casting, machining, assembly, prototyping, testing, and painting technologies. Machining and heat treatment technologies include carburizing, induction hardening, and nitriding.

Products:

Agricultural Tractors: These include axles for agricultural tractors and transmission systems having special requirements on technical specifications, use cases, and mechanical and structural design. 

Construction Vehicles: They manufacture gears and transmission systems for backhoe loaders, compact wheel loaders, telehandlers, cranes, forklifts, aerial working platforms, etc. 

Others: In addition to their core offerings of axles and transmissions for agricultural and construction equipment, the company also manufactures several other miscellaneous products such as gears and shafts, and ring gears for industrial and automotive vehicles. 

The company has developed considerable expertise in the agricultural tractor and construction vehicle industry within India and has established a network of 220 suppliers across eight states in India.

This new IPO is to be launched on 20 December 2024, and the initial public offering of this upcoming IPO will end on 24 December 2024.

 

Carraro India IPO Details

The Rs.1250 Crore IPO comprises a wholly offer for sale (OFS) of 1.78 Cr Shares. The IPO listing date is on December 30, 2024. Carraro India IPO price is Rs.668 to Rs.704. 

If you want to apply for the IPO, Click Here to open a Demat Account.

Company Financial

Between FYs ended 31 March 2024 and 31 March 2023, the company's revenue grew by 4%, and PAT increased by 29%.

(Amount in Crore)

 

Cash Flows

The cash flows for various activities are shown below:

(Amount in millions)

 

Sector-wise Revenue Bifurcation

(Amount in millions)

Geography-wise Revenue Bifurcation

(Amount in millions)

(Source RHP)

 

The Objective of the Issue

The promoter-selling shareholder will get all offer proceeds after deducting offer-related costs and applicable taxes, which will be the promoter-selling shareholder's responsibility. The company won't get any proceeds from the offer.

 

Peers of Carraro India Limited

 

Evaluation

The Carraro India Limited IPO price band is between Rs.668 to Rs.704 for each Share.


Evaluation of P/E Ratio

Considering the FY ended 31 Mar 2024 with an EPS of Rs.11 from the last year, the resulting P/E ratio is 64x. 

Considering the weighted EPS of Rs.9 for the last three years, the P/E ratio is 78.22x.

Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is 55.80x.

In simple words, the P/E ratio of this IPO (64x), compared with the industry’s average P/E of 55.80x, has an overvaluation (on a P/E ratio basis only). Hence the price of the Share seems aggressively priced for the investors when considered based on the average P/E ratio of the industry.

 

IPO's Strengths    

• These suppliers are reputed Tier 1 Transmission System suppliers and also have a role as axle suppliers in India's agricultural tractor and construction vehicle industries. Their mission-critical driveline components present wide competitive moats and are extremely complex.

• A customized offering for customers to long-term OEM customers.

• Long associations with a premium local and international supplier base.

• Strong co-generated R&D capabilities backed by proprietary IP rights to design new-to-market products.

• High-tech manufacturing plants with vast production capabilities and in-house gear production facilities.

• Complete Tier 1 Transmission System supplies are said to be axle supplier in India for agricultural tractor and construction vehicle industries. Such mission-critical and complex driveline components create a wide competitive gate.

• Customer-specific offerings of customized solutions to a long-staying OEM customer base.

• Long-standing relationships with signature local and international supplier base Strong in-house R&D capabilities with proprietary IP rights for developing products of the future.

• Technologically advanced manufacturing plants with huge production capacities and in-house gear production capacities.

 

IPO’s Weaknesses 

• Being overly reliant on the agricultural and construction sectors puts the business at industry risk. 

• Geographical presence beyond India is limited which could restrict the propensity for global market penetration.

• Few marquee customers are highly relied upon, hence increasing concentration risk.

• Costs incurred from advanced technology maintenance as much as R&D capabilities are considerable. 

• Global players compete with the market of key segments in terms of reach of the company's market.

 

Carraro India IPO GMP

Carraro India IPO GMP today is Rs.0 as of 18 December 2024. With the price band of Rs.704, the estimated Carraro IPO listing price is Rs.704 while writing this information.

Carraro IPO Timetable (Tentative)

The IPO date is from 20 December to 24 December, with IPO allotment on 26 December, and refund initiation on 27 December. The IPO listing date is on 30 December 2024.

 

Carraro India IPO Other Details 

Carraro IPO with a face value of Rs.10 per Share, the IPO size is 1,77,55,680 Shares (Rs.1250 Cr) and it will be listed at BSE and NSE.

Carraro India IPO Lot Size

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (21 Shares) amounting to Rs.14784 and 13 Lots (273 Shares) amounting to Rs.1,92,192 respectively, while for HNI investors, the minimum Lot is 14 (294 Shares) amounting to Rs.2,06,976.

IPO Reservation

Promoters and Management of Carraro India Ltd.

• Tomaso Carraro

• Enrico Carraro

• Carraro S.p.A

• Carraro International S.E.
  
  

IPO Lead Managers

• Axis Bank Limited

• BNP Paribas

• Nuvama Wealth Management Limited. 

 

Dividend Policy

The company has paid a dividend of Rs.0.88 and Rs.5.45 per equity share in FY23 and FY24 respectively.

Conclusion

In the transmission systems sector, Carraro India IPO is a wonderful investment opportunity, but the pricing seems aggressive considering the P/E values for industry comparatives in this regard. The company owns an excellent R&D and manufacturing infrastructure with established customer relationships and risks like dependency on the sector and a limited physical footprint worldwide. Hence, investors must analyze their options. Investors should take these factors into account before investing. 

 

DISCLAIMER: This is NOT any buy or sell recommendation. No investment or trading advice is given. The content is purely for educational and information purposes only. Always consult your eligible financial advisor for investment-related decisions. 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here to Download the DRHP.

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