kross ipo: Kross IPO subscribed over 4 times so far on Day 3. Check GMP, other details

Around 11:45 am, the highest demand was driven by the non-institutional investors, subscribing the issue by 6.2 times, followed by the retail investors, booking the issue by 5.7 times. The portion for qualified institutional buyers merely attracted 1.92 lakh bids out of 43.86 lakh shares reserved for them, subscribing to the issue by merely 3%.

The Rs 500 crore IPO of the Jamshedpur-based company comprises a fresh equity sale of up to Rs 250 crore and an offer for sale (OFS) of up to Rs 250 crore by the promoter-selling shareholders.

Under the OFS, Sudhir Rai and Anita Rai will offload part stakes in the company.

Kross IPO price band
The company has fixed a price band of Rs 228-240 per share, where investors can bid for 62 shares in one lot.

Kross IPO GMP
Ahead of the issue opening, the GMP for Kross Ltd was up to Rs 50 from Rs 48 on Tuesday. Today’s GMP indicates nearly a 21% premium over the issue price.Kross IPO review
“At the upper price band of Rs 240, the company is valued at FY24 P/E multiple of 34.5x based on its post issue capital. The issue appears to be fairly valued given the healthy growth track record of the company. We recommend subscribing to the issue for a long term investment horizon,” said SBI Securities.

“Despite a slightly higher P/E ratio of 28.92x compared to the industry average of 26x, Kross’s strong future growth potential, capacity expansion plans, and forward integration strategies make this issue appear attractive,” said Canara Bank Securities.

Other details
The IPO proceeds will be used by the management to repay debt and fund future growth which will likely boost earnings growth for the company.

Kross is a prominent manufacturer of a wide range of forged and machined components in India, with a growing export presence globally.

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It manufactures a wide range of high performance and safety critical components for the commercial vehicle and tractor segment and operates out of its five manufacturing facilities in Jamshedpur, Jharkhand which are equipped with capabilities to design, develop and manufacture its diverse product portfolio.

The company, which counts Ashok Leyland and Tata International DLT as its key clients, supplies its products to a diversified client base which includes large original equipment manufacturers (OEMs) manufacturing M&HCV and tractors, tier one suppliers to the OEMs in the M&HCV segment, domestic dealers and fabricators for its trailer axle and suspension business.

It has also attracted new customers such as Leax Falun AB, a Sweden based company manufacturing propeller shafts for commercial vehicle OEMs and a Japan based OEM manufacturing commercial vehicles.

For the year ended March 2024, revenue from operations increased 27% year-on-year to Rs 620 crore, while net profit after tax increased 45% to Rs 44.8 crore. Its revenue, EBITDA, and PAT have grown at a CAGR of 44.4%, 65.5%, and 91.8%, respectively over FY22-24.

Equirus Capital is the sole book-running lead manager to the offer.