Indo Farm Equipment IPO open for subscription; should you apply?

The initial public offering (IPO) of Indo Farm Equipment Limited (IFEL) - a manufacturer of tractors and pick-and-carry cranes - opened for subscription on Tuesday, December 31, 2024. The company has launched the issue with a total issue size of Rs 260.15 crore with a price band between Rs 204 and Rs 215. The issue will close for public subscription on January 2, 2024. Should you subscribe to it? Here is all you need to know:

Should you subscribe?

Analysts at SBI Securities recommend 'subscribing' to the issue at a cut-off price from the perspective of the long term. However, the brokerage also stated that between FY22-24 the company’s sales, EBITDA, and PAT showed a slower CAGR growth of 3.2 per cent, 9.5 per cent, and 6.6 per cent, respectively.

Furthemore, SBI Securities' analysts said its pick & carry crane sales have grown at a CAGR of 45 per cent in the past three years with plant operating at close to full capacity.

Another domestic brokerage KRChoksey has a 'neutral' rating on the Indo Farm Equipment IPO, citing that it faces challenges in efficiently managing its working capital and improving margins due to high inventory levels which could result in potential losses during liquidation. "Tractor sales are inherently cyclical, and the company faces stiff competition from established players in the tractor market," the brokerage said.

According to the KRChoksey analysts, in terms of valuation, the current P/E ratio of 66x is expensive in comparison to industry peers, considering these uncertainties and challenges, it assigned a 'neutral' rating on the IPO.

Meanwhile, Ventura Securities has recommended to subscribing to the public issue in their report, dated December 30, 2024, without considering valuation and outlook.

Indo Farm Equipment IPO Key Details: Lot size, allotment date and other details

The lot size of the IPO is 69 shares and in multiple thereof. The price has been fixed between Rs 204 and Rs 215.

Indo Farm Equipment IPO | Allotment date

The allotment date of Indo Farm Equipment IPO is fixed on Friday, January 3, 2025.

Indo Farm Equipment IPO | Listing Date

The Indo Farm Equipment IPO stock will debut on Tuesday, January 7, 2025.

BRLMs & registrar

Book Running Lead Managers (BRLMs): Aryaman Financial Services Ltd. 

Official Registrar: MAS Services Ltd