Kross Limited IPO
Delve into the in-depth exploration of Kross Limited's IPO - a tale of innovation in manufacturing trailer axles, suspension assemblies, and vital components for commercial vehicles and farm machinery. Uncover the company's origins, IPO specifics, financial achievements, and strategic investment suggestions.
RI
by RA ALOK DAIYA SEBI Reg. INH000011468
About Kross Limited
Over 30 Years Experience
Established in 1990, Kross boasts over 30 years of experience in manufacturing trailer axles and suspension assemblies.
Diverse Product Portfolio
Kross provides a range of high-performance safety-critical components for commercial vehicles and farm equipment, including axles, suspension assemblies, brake systems, and other parts.
Long-Term Client Relationships
Kross maintains strong partnerships with leading OEMs like Ashok Leyland, Tata International, and Mahindra, solidifying a robust market position.
Manufacturing Capabilities
Kross is backward integrated, with capabilities spanning design, process engineering, forging, and manufacturing. It has a mobile service operation for trailer axles and suspension assemblies, using a custom software for service tracking. Kross manufactures a wide range of components, including forged parts up to 40 kg. The company is expanding its capacity and product offerings with a new casting facility, additional production lines, and new part lines such as hydraulic covers for tractors. As of June 30, 2024, Kross had 528 employees and 1661 contractual workers.
IPO Details
1
Offer Structure
The company is coming out with its maiden/combo IPO of fresh equity shares issue worth Rs. 250 cr. (approx. 10416667 shares at the upper cap), and an Offer for Sale (OFS) of Rs. 250 cr. (approx. 10416667 shares at the upper cap).
2
Price Band
The company has announced a price band of Rs. 228 - Rs. 240 per equity shares of Rs. 5 each.
3
Issue Dates
The issue opens for subscription on September 09, 2024, and will close on September 11, 2024.
4
Listing
Post allotment, shares will be listed on BSE and NSE.
Objectives of the Issue
Funding Capital Expenditures
The Company will use a portion of the Net Proceeds to fund new machinery and equipment, increasing its manufacturing capacity and efficiency.
Repayment of Borrowings
Another portion of the Net Proceeds will be used to repay or prepay outstanding borrowings, reducing debt and enhancing financial flexibility.
Funding Working Capital Requirements
The Company will allocate a portion of the Net Proceeds to fund working capital, ensuring smooth operations and healthy cash flow.
General Corporate Purposes
Finally, a portion of the Net Proceeds will be used for general corporate purposes, such as business development and other operational activities.
Kross IPO Timeline
1
IPO Open Date
Monday, September 9, 2024
2
IPO Close Date
Wednesday, September 11, 2024
3
Cut-off time for UPI mandate confirmation
5 PM on September 11, 2024
4
Basis of Allotment
Thursday, September 12, 2024
5
Initiation of Refunds
Friday, September 13, 2024
6
Credit of Shares to Demat
Friday, September 13, 2024
7
Listing Date
Monday, September 16, 2024
Financial Performance
Kross has shown consistent financial growth over the past three years, with total income and net profit increasing steadily. In FY24, total income reached Rs. 621.46 cr. and net profit reached Rs. 44.88 cr.
Key metrics include an average EPS of Rs. 6.43, an average RoNW of 28.18%, and profitability margins of 7.22% for PAT and 28.15% for RoCE in FY24.
1
FY22
Total Income: Rs. 297.88 cr. Net Profit: Rs. 12.17 cr.
2
FY23
Total Income: Rs. 489.36 cr. Net Profit: Rs. 30.93 cr.
3
FY24
Total Income: Rs. 621.46 cr. Net Profit: Rs. 44.88 cr.
Investment Recommendation
Strengths
Kross Limited has established a strong position in its market with long-standing relationships with key clients. The company has consistently grown its revenue and profitability.
Valuation
The IPO appears to be priced aggressively based on FY24 earnings.
Recommendation
Investors with a medium to long-term perspective may consider allocating capital to Kross Limited.