Kross Limited IPO: Review, Valuation, Date & GMP

Kross IPO-Complete Overview

Kross IPO a Mainboard IPO is a book-built issue of Rs.500 crore (20,833,334 Shares) by Kross Ltd. formerly Kross Manufacturers (India). The company was founded in 1991 and produces and distributes trailer axles, suspensions, and a variety of precision machined high-performance forged safety critical parts for agricultural equipment and medium and heavy-duty commercial vehicles (M&HCV).

Axle shafts, companion flanges, stabilizer bar assemblies, anti-roll bars, suspension linkages, differential spiders, bevel gears, planet carriers, inter-axle kits, rear-end spindles, pole wheels, and various tractor parts for the hydraulic lift arrangement, power take-off (PTO) shafts, and front axle spindles are among the products offered by the company.

Kross Ltd.’s operating revenue increased at a CAGR of 44.40% between FY 2022 and 2024.

The business provides its goods to large original equipment manufacturers (OEMs) that build tractors and M&HCVs, as well as to domestic dealers and producers of trailer axles and suspension that provide OEMs in the M&HCV market.In Jamshedpur, Jharkhand, Kross Limited operates five ISO 9001:2015 certified manufacturing facilities that can produce forgings up to 40 kg in weight. The production facilities include: 

• Upsetting lines and forging presses with billet induction heating

• A foundry featuring a line for high-pressure molding

• Extremely precise machining equipment, such as robotic welding systems, grinding, broaching, hobbing, and shaping machines, turning centers, vertical and horizontal milling centers, and more

• Spray painting, powder coating, an internal cathodic electro-dip painting system (CED system)

• Induction hardening systems and furnaces for heat treatment.

 

This New IPO is to be launched on 09 September 2024, and the initial public offering of this upcoming IPO will end on 11 September 2024.

Kross IPO Overview

The Rs.500 crore Kross Ltd. IPO comprises a combination of a fresh Issue of 1.04 crore Shares amounting to Rs.250 crore and an Offer for Sale (OFS) of 1.04 crore Shares amounting to Rs.250 crore out of which 35% is allocated to retail investors, 50% to institutional investors and 15% to non-institutional investors. 

The IPO date is from 09 September to September 11, 2024. The IPO listing is on Monday, September 16, 2024, and it will be held on the BSE and NSE. Kross IPO price band is between Rs.228 to Rs.240 for each Share.

If You want to apply for the IPO, Click Here to Open a Demat Account.

Company Financial

The company’s revenue grew by 27% and PAT increased by 45% between FY 24 and 23.

Below is the synopsis of the company's financial data for the financial year that concluded on 31 March 2024.

• The total assets of the company are Rs.352 crore.

• The company’s total revenue is Rs.621.46 crore.

• The company’s PAT is Rs.44.88 crore.

• The net worth of the company is Rs.146.81 crore.

• The company's EBITDA is Rs.80.75 crore.

 

Detailed VIdeo:

(Amount in Crore)

 

Revenue Bifurcation

Below is the revenue breakdown for various activities.

(Amount in million)

 

Product-wise Revenue Bifurcation During Last Three Fiscals

(Values in millions)

 

Industry-wise Sales Bifurcation of Products During Last Three Fiscals

(Values in millions)

 

Geography-wise Sales Bifurcation of Products During Last Three Fiscals

(Values in millions)

 

 

 

The Objective of The Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• Paying back or prepaying all or a portion of the company's outstanding loans from banks and other financial institutions

• Meeting the company's working capital needs 

• Funding the company's capital expenditure requirements for the acquisition of machinery and equipment 

• Corporate Purposes.

 

Peers of Kross Ltd.

 

Note: The above comparison of listed peers is as per data by FY 2024.

Evaluation

Kross share price is between Rs.228 to Rs.240 for each Share.

Evaluation of P/E Ratio

Considering the FY 2024, with an EPS of Rs.8.30 from the last year, the resulting P/E ratio is 28.91x.

Considering the weighted EPS of Rs.6.43 for the last three years, the P/E ratio is 37.32x.

Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is 24.85x.

In simple words, the P/E ratio of Kross IPO (28.91x), compared with the industry’s average P/E of 24.85x, has an overvaluation (on 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.

Note: The EPS and weighted EPS of the company are as of 31 March 2024 and the industry P/E Ratio is computed based on the closing market price of the Share as of 14 August 2024..

 

IPO's Strengths 

• Its trailer axle and suspension business has a long-standing relationship with large OEMs and their tier-one suppliers, as well as a diverse network of dealers.

• The company is widely recognized as one of the leading manufacturers in India of trailer axles and suspension assemblies, and one of the few domestic players with the capacity to manufacture trailer axles and suspension assemblies in-house.

• Its product portfolio is diversified, with a focus on continuous value addition.

• The integrated manufacturing operations are paired with in-house product and process design capabilities that offer scale, flexibility, and comprehensive solutions.

• A history of steady expansion and strong financial results during the last three FYs.

 

IPO’s Weaknesses 

• The manufacture and sales of M&HCV and farm equipment by its clients immediately affect the demand for its goods. The general state of the economy or the industry, increasing industrial activity, agricultural output, the rate of infrastructure development, changing regulatory requirements, Government initiatives, and trade agreements can all have an impact on the production and sales of M&HCV and farm equipment.

• The company’s sales are influenced by the inventory levels of manufacturers in these industries and are directly reliant on the output levels of OEMs in the M&HCV and farm equipment industries as well as tractor-trailer manufacturers.

• It sells trailer axle and suspension assemblies for medium and heavy commercial vehicles (M&HCV), which contributes to a major of its income. Any decline in demand for its core products brought about by modifications to laws or advancements in technology, such as the use of more renewable or green energy, would be extremely detrimental to its business.

• Since its manufacturing facilities are situated in the same area, any disruptions in the production process brought on by regional or local issues could harm the company.

• A few of its products, specifically trailer axles, are offered with kilometer-based guarantees of 1,00,000 and 4,00,000 kilometers. For certain of these goods, the company is responsible for replacing specific parts or the entire unit during the warranty period. Customer unhappiness could negatively impact the business, sales, and operational outcomes if any of the products don't meet applicable quality standards or break down during the warranty period.

• In the last FYs, its financing and investing activities resulted in negative cash flows.

 

Kross IPO GMP Today

Kross Limited IPO GMP has not started yet as of 04 September 2024.

 

Kross IPO Timetable (Tentative)

The IPO open date is from September 09 to September 11, 2024, with IPO allotment on September 12, 2024, refund initiation on September 13, 2024, and listing on September 16, 2024.

 

Kross IPO Details 

The IPO with a face value of Rs.5 per Share is set to start on September 09, 2024, close on September 11, 2024, and offers a total issue size of 20,833,334 Shares between Rs.228 to Rs.240 per Share with a Lot size of 62 Shares and will be listed at BSE and NSE.

 

Kross IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (62 Shares) amounting to Rs.14,880 and 13 Lots (806 Shares) amounting to Rs.1,93,440 respectively, while for HNI investors, the minimum Lot is 14 (868 Shares) amounting to Rs.2,08,320.

Kross IPO Reservation

• Sudhir Rai

• Anita Rai

 

Kross IPO Lead Managers

• Equirus Capital Private Limited.

Dividend Policy

The company paid a dividend of Rs.1 per equity share amounting to Rs.13.52 million in the FY 2023.

Conclusion

The company has experienced negative cash flow in financing and investing activities in the last few fiscal years. To fulfill its objectives, the company is currently conducting an IPO for the public.

We believe the information offered in this blog helps you learn about the company's financial performance. So this blog will be very useful to you if you are looking for information about the approaching IPO since it will give you reliable information about the company's, insights, financials, and past performance. If this informative blog piques your interest, you may be interested in reading our other related and useful posts on our website.

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.

Disclaimer: 

The content is purely for educational and information purposes only. We do NOT encourage/advise/suggest our active readers to be involved in any kind of buying or selling securities activities. Always consult your eligible financial advisor for investment-related decisions. The author does NOT through this blog intend to involve readers in trading.  

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