Indo Farm Equipment listing: Shares enter listed space at over 20% premium

After drawing huge investor interest during the IPO process, shares of Indo Farm Equipment listed on the bourses on Tuesday (January 7). The stock on the BSE listed at a price of Rs 258.4, signifying a premium of 20.19 per cent. On the NSE it debuted at Rs 256 against the issue price of Rs 215 per share, a premium of over 19 per cent. 

Overall the Rs 260.15 crore, issue was subscribed 229.68 times. In the retail category, the issue received 104.92 times the bids, while the Qualified Institutional Buyers (QIB) segment was subscribed 242.4 times. The Non-Institutional Investors (NII) category saw exceptional demand, with a subscription rate of 503.83 times, as per the NSE data.

Experts and analysts' view on listing

Zee Business Managing Editor Anil Singhvi on the listing of Indo Farm Equipment said the issue fetched a huge response and nowadays small-sized, low-priced IPOs are getting strong response. And in such instances, it is difficult to predict the listing price.

Nonetheless, he expected the stock to list in the price range of Rs 250-260 per share, a premium of nearly 21 per cent as against the issue price.

For allottees he suggested, one can keep a stoploss of Rs 235 and keep trailing.

Prashanth Tapse, Senior VP (Research), Mehta Equities, meanwhile, said that despite the offer being slightly on the expensive side, Indo Farm Equipment received overwhelming response.

"We believe the massive demand was on the back of the main reason being that the company is spending ipo proceeds to strengthen its dealer network which can eventually lead to higher tractor sales in future. On the other hand,  the company is in expansion mode for its pick and carry cranes capacities to meet rising demands followed by strong backward integration business model helping the company to enjoy high EBITDA margin when compared to its peers and assuming bright prospects for growth in agriculture segment as well as cranes segments due to huge infrastructure spending from Govt and Private industries."

Considering renewed market sentiments and massive subscription demand, we expect the company can list with strong listing gains over and above around 40 per cent on its issue price, he added.

Indo Farm IPO details

The public issue of the crane and tractor manufacturing company ran between December 31 and January 2. The offer comprised a fresh issue of 0.86 crores equity shares, having a combined value of Rs 184.9 crore, while an offer-for-sale (OFS) of 0.35 crore shares with a total value of Rs 75.25.1