Are you interested in participating in an IPO that could revolutionize the Indian agriculture and construction sectors? If yes, Carraro India Limited, a leading manufacturer of transmission systems, gears and axles for agricultural tractors and construction vehicles just launched its IPO on Friday, December 20, 2024! So, could this be a golden investment opportunity and is this IPO the right addition to your investment portfolio?
In this article, we will explore the key aspects of the Carraro India IPO, its potential and subscription status on the first day.
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Table of Contents
Carraro India IPO Details
The IPO of Carraro India is a book-built issue valued at ₹1,250 crore and is entirely an offer for sale. This means that the proceeds from the issue will not be used for corporate purposes, but rather to provide an exit for the existing shareholders.
Carraro India’s ₹1,250 crore IPO opened for subscription on Friday, December 20, 2024 and will close on Tuesday, December 24, 2024. The allotment for the IPO is expected to be finalized on Thursday, December 26, 2024 with a tentative listing date on the stock exchanges set for Monday, December 30, 2024. The price band for Carraro India shares has been fixed at ₹668 to ₹704 per share.
| IPO Name | Carraro India Limited |
| IPO Open Date | 20 December 2024 |
| IPO Close Date | 24 December 2024 |
| Price Band | ₹668 to ₹704 per share |
| Lot Size | 21 shares |
| Face Value | ₹10 per share |
| Total-Issue Size | 1,77,55,680 shares (aggregating up to ₹1,250 Cr) |
| Offer for Sale | 1,77,55,680 shares of ₹10 (aggregating up to ₹1,250 Cr) |
| Share Holding Pre Issue | 5,68,51,538 shares |
| Share Holding Post Issue | 5,68,51,538 shares |
| Share Allotment Date | 26 December 2024 |
| Initiation of Refund | 27 December 2024 |
| Credit of Shares to Demat | 27 December 2024 |
| Listing Date | 30 December 2024 |
| UPI Cut Off Time | 24 December 2024 – 5 P.M. |
| Listing Exchange Name | BSE, NSE |
| Lead Manager(s) of Issue | Axis Capital Limited, BNP Paribas, Nuvama Wealth Management Limited |
| Registrar of Issue | Link Intime India Private Limited |
For detailed information, you can refer to Carraro India IPO RHP.
Carraro India IPO GMP Today
Currently, the IPO has garnered minimal interest from market participants. Ahead of its market listing, the IPO is trading at a 0% premium. The latest Grey Market Premium (GMP) stands at ₹0, indicating no expected listing gain.
Check IPO Live GMP: View now for Real-Time Updates
Carraro India IPO Lot Size
Carraro India Limited has issued 1,77,55,680 shares worth ₹1,250 crore for an offer for sale issue. The minimum lot size for an application is 1 lot (21 shares) and the minimum amount of investment required by retail investors is ₹14,784.
The minimum lot size investment for s-HNI (Small High Net Worth Individual) is 14 lots (294 shares), amounting to ₹2,06,976, while the maximum is 67 lots (1,407 shares), amounting to ₹9,90,528.
For b-HNI (Big High Net Worth Individual), the minimum lot size is 68 lots (1,428 shares) amounting to ₹10,05,312.
| Category | Lots | Shares | Amount |
|---|---|---|---|
| Retail(Min) | 1 | 21 | ₹14,784 |
| Retail(Max) | 13 | 273 | ₹1,92,192 |
| s-HNI(Min) | 14 | 294 | ₹2,06,976 |
| s-HNI(Max) | 67 | 1,407 | ₹9,90,528 |
| b-HNI(Min) | 68 | 1,428 | ₹10,05,312 |
Carraro India IPO Reservation Details
Carraro India has offered a total of 1,77,55,682 shares where 53,26,703 (30%) shares have been offered to Anchor investors, 35,51,138 (20%) to QIB, 26,63,352 (15%) to NII and 62,14,489 (35%) to RII.
| Investor Category | Shares Offered |
| QIB Shares Offered | Not more than 50% of the Net Issue |
| Retail Shares Offered | Not less than 35% of the Net Issue |
| NII (HNI) Shares Offered | Not less than 15% of the Net Issue |
Carraro India IPO Anchor Investors Details
On December 19, 2024, Carraro India raised ₹375 crore from anchor investors. Here are the details:
| Bid Date | December 19, 2024 |
| Shares Offered | 53,26,703 |
| Anchor Portion Size (In Cr.) | 375 |
| Anchor lock-in period end date for 50% shares (30 Days) | January 25, 2025 |
| Anchor lock-in period end date for remaining shares (90 Days) | March 26, 2025 |
Carraro India IPO Subscription Status on First Day
On its first day i.e. on December 20, 2024, the IPO has been subscribed just 0.16 times in the retail category and 0.06 times in the NII category, resulting in an overall subscription of 0.09 times.
| Date | QIB | NII | Retail | Total |
|---|---|---|---|---|
| No. of Times Subscribed | 0.00 | 0.06 | 0.16 | 0.09 |
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About the Company
Next, let’s shift our focus to explore more about the company’s background, operations, strengths and risks, financial statements and key highlights.
Established in 1997, Carraro India Limited has evolved into a leading manufacturer of transmission systems (axles, transmissions and drives) and other components for off-highway vehicles used in the agricultural and construction sectors. The company also provides solutions such as in-house product design, manufacturing and supply of critical components for off-highway vehicles.
Products:
- Agricultural Tractors: The company manufactures axles and transmission systems for agricultural tractors, designed based on specific technical requirements, use cases and mechanical designs.
- Construction Vehicles: Carraro India produces gears and transmission systems for various construction vehicles including backhoe loaders, compact wheel loaders, telehandlers, cranes, forklifts and aerial work platforms.
- Other Products: Additionally, the company manufactures gears, shafts and ring gears used in industrial and automotive vehicles.
Company Facilities:
Carraro India operates from two state-of-the-art manufacturing facilities in Pune, Maharashtra. The Driveline Manufacturing Plant spans approximately 84,000 square meters, while the Gear Manufacturing Plant covers around 78,000 square meters.
- The Driveline Plant offers technologies such as casting, machining, assembly, prototyping, testing and painting.
- The Gear Plant is equipped with machining and heat treatment technologies such as carburizing, induction hardening and nitriding.
The company’s manufacturing excellence is demonstrated through its comprehensive capabilities, from casting and machining to assembly and testing. As of September 30, 2024, the company has a network of 220 domestic suppliers across eight states and 58 international suppliers supported by 87 full-time quality and after-sales employees. The company has established itself as a crucial Tier 1 supplier in the industry. Their financial performance has been steady, achieving 4% revenue growth and a 29% PAT increase between FY23 and FY24.
Competitive Strengths:
- The company plays a key role in India’s agricultural tractor and construction vehicle industries as a Tier 1 Supplier.
- It offers customer-centric solutions and has long-standing relationships with OEM customers.
- Carraro India has strong supplier relationships and a robust global supplier network.
- It boasts strong R&D capabilities and a focus on innovation with proprietary technologies.
- The company operates technologically advanced manufacturing plants and possesses in-house gear production capabilities.
Carraro India Limited has developed expertise in the agricultural tractor and construction vehicle sectors, establishing itself as a leader in the industry. Its advanced manufacturing technologies and customer-focused approach make it a strong competitor in the market.
Carraro India IPO Objectives (Objects of the Issue)
The company will not receive any proceeds from the offer. Instead, all proceeds from the offer will be received by the Promoter Selling Shareholder after deducting the offer-related expenses and any applicable taxes, which will be paid by the Promoter Selling Shareholder.
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Carraro India Limited Financial Information (Restated Consolidated)
The revenue of Carraro India Limited has increased by 4% and profit after tax (PAT) rose by 29% in the FY24 (April 1, 2023 to March 31, 2024).
| Period Ended | 31 Mar 2022 | 31 Mar 2023 | 31 Mar 2024 | 30 Sep 2024 |
| Assets | 1,012.44 | 1,072.39 | 1,072.89 | 1,093.41 |
| Revenue | 1,520.05 | 1,733.3 | 1,806.55 | 922.74 |
| Profit after Tax | 22.43 | 48.46 | 62.56 | 49.73 |
| Net Worth | 292.49 | 337.38 | 369.82 | 419.44 |
| Total Debt | 178.14 | 188.33 | 212.55 | 195.78 |
| Amt in ₹ Crore | ||||
Key Performance Indicators
The current market capitalization of Carraro India Limited is ₹4002.35 crore. As of March 31, 2024, the company’s key performance indicators (KPIs) include an impressive Return on Capital Employed (ROCE) of 19.35% and a Return on Net Worth (RoNW) of 16.92%.
| Key Performance Indicators | Value |
|---|---|
| ROE | 17.69% |
| ROCE | 19.35% |
| Debt/Equity | 0.58 |
| RoNW | 16.92% |
| PAT Margin | 3.50% |
The EPS and PE ratios before and after the Carraro India IPO issue are detailed in the list below:
| Ratios | Pre IPO | Post IPO |
| EPS (₹) | 11.00 | 17.50 |
| P/E (x) | 63.97 | 40.24 |
- The Pre-IPO EPS is calculated based on the pre-issue shareholding as of the RHP date and the latest FY earnings available in the RHP, as of March 31, 2024.
- The Post-IPO EPS is calculated based on the post-issue shareholding and annualized FY earnings as of September 30, 2024, as provided in the RHP.
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Carraro India IPO Review (May Apply)
The review of the Carraro India IPO has been done based on the following points:
- Revenue Growth: The company’s revenue has increased from ₹1,520.05 crore in FY22 to ₹1,806.55 crore in FY24 (19% growth). This reflects steady growth and a strong market presence.
- Profit Growth: The PAT increased substantially from ₹22.43 crore in FY22 to ₹62.56 crore in FY24, reflecting a growth of approximately 179% and highlighting the company’s strong fundamentals.
- Valuation Metrics: Pre-IPO P/E: 63.97 | Post-IPO P/E: 40.24
As per the RHP, the company has shown Escorts Kubota, Schaeffler India, Sona BLW, Ramkrishna Forgings, Happy Forgings and Action Constructions as their listed peers. They are trading at a P/E of 31.6, 55.0, 65.9, 44.7, 37.4 and 49.4 (as of December 18, 2024) respectively. While the top companies in the auto ancillaries sector have a P/E ratio in the range of 40-60x, the average P/E ratio for this sector is around 31x, which suggests that this IPO may be slightly overvalued.
- Return on Capital Employed (ROCE) and Return on Net Worth (RoNW):
ROCE: 19.35% reflects the company’s capital efficiency.
RoNW: 16.92% is good for long-term investors.
- GMP and IPO Price Band: With a price band of ₹668 to ₹704 per share and a GMP of ₹0, the market shows very minimal interest, suggesting no listing gain.
Strengths
- Leading Manufacturer of Transmission Systems: Carraro India is a Tier-1 supplier of critical driveline components such as axles and transmissions for India’s agricultural and construction vehicle industries. The company’s expertise in mission-critical components and longstanding relationships with key OEM customers provide it with a significant competitive moat.
- Strong Financial Performance: Carraro India showed steady growth, with the company reporting a profit after tax (PAT) of ₹49.73 crore in H1 FY25, surpassing the ₹48.46 crore PAT recorded for the entire FY23. This reflects the company’s ability to scale operations efficiently while maintaining profitability.
- Technologically Advanced Manufacturing Facilities: Carraro India operates two large manufacturing plants in Pune, Maharashtra, equipped with advanced technologies for machining, assembly, testing and heat treatment. The plants cater to diverse product lines, ensuring high-quality production with large-scale capacity.
- Diversified Product Portfolio: The company serves multiple sectors including agricultural tractors, construction vehicles (gears and systems for backhoe loaders, cranes, forklifts and more) and automotive & industrial vehicles (gears, shafts and specialized components).
- Established International and Domestic Supplier Network: Carraro India has built a robust supply chain with 220 suppliers across 8 Indian states and 58 international suppliers. This extensive network ensures timely delivery of components and raw materials at competitive prices.
- Experienced Management and R&D Capabilities: The company boasts a professional leadership team and a strong R&D division that drives innovation, with proprietary IP rights enabling the development of future-ready products.
Risks
Here are some of the risk factors involved in this IPO that investors should know before subscribing to the issue:
- High Dependence on Global Base: The company relies heavily on its global base of OEM customers. Exports contributed ₹315.07 crore (34.60%) for the six months ended September 30, 2024, ₹548.36 crore (36.80%), ₹650.64 crore (38.19%) and ₹638.40 crore (35.87%) to the revenue from operations in FY22, FY23 and FY24 respectively. Any inability to maintain the stability of its existing OEM customer relationships or attract new customers could adversely impact its financial condition and operational results.
- Revenue Concentrated from a Single State poses Geographic Risks: The manufacturing operations of Carraro India are concentrated in Pune, Maharashtra. Any adverse developments in Maharashtra such as labour disputes, natural disasters or regulatory changes could hit production, negatively impacting the company’s financial performance.
- Economic Cyclicality: Demand for off-highway vehicles depends on agricultural and infrastructure growth.
- Intense Competition: Competes with global and domestic players in transmission systems and gears.
- Raw Material Price Volatility: Fluctuations in steel and raw material costs may impact margins.
All the above-mentioned risks should be considered by investors before deciding to invest in the IPO.
Opinion
Given the company’s financial growth, strong fundamentals, the IPO appears attractive and so you can go through the points mentioned below to plan accordingly:
- Long-Term Investors: Based on the company’s performance to date, the issue appears appealing. So, investors might consider holding their investments for the long term.
- Short-Term Investors: Short-term traders or investors should pay attention to the GMP trend on the listing day for any short-term gains, which doesn’t look good as of now with no return on the listing date.
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Additional Details
Promoter Holding
Mr. Tomaso Carraro, Mr. Enrico Carraro, Carraro S.p.A and Carraro International S.E are the promoters of the company. Their shareholding before and after the issue is as follows:
| Pre Issue Shareholding | 100.00% |
| Post Issue Shareholding | 68.77% |
Carraro India IPO Allotment Status: Check Now
Carraro India Limited Contact Details
Address: B2/ 2 MIDC, Ranjangaon, Pune, Maharashtra – 412220
Phone: +91 -2138662666
Email: [email protected]
Website: https://www.carraroindia.com/
Carraro India IPO Registrar Details
Registrar: Link Intime India Private Limited
Address: C 101, 247 Park, L.B.S.Marg, Vikhroli (West), Mumbai – 400083
Phone: +91-2249186270
Email: [email protected]
Website: https://linkintime.co.in/Initial_Offer/public-issues.html
Disclaimer: We are not a SEBI-registered research analyst. This article is written solely for educational purposes and should not be interpreted as investment advice or recommendations. The stock market involves significant risks, so we encourage you to seek guidance from a financial advisor before making any investment decisions.
FAQs
Q1. What is Carraro India IPO?
Carraro India IPO is a book-built issue of an offer for sale issue, where the company aims to raise ₹1,250 crore through this IPO.
Q2. What is the price band of Carraro India IPO?
The price band of this IPO has been fixed at ₹668 to ₹704 per share. This price range presents a good opportunity for investors.
Q3. What are the important dates for Carraro India IPO?
The IPO opens on 20 December 2024 and closes on 24 December 2024. The listing of shares will take place on 30 December 2024 on NSE and BSE.
Q4. How many shares are being offered in the Carraro India IPO?
A total of 1,77,55,680 shares are being offered in the company’s IPO.
Q5. What is the lot size of Carraro India IPO?
The lot size of the Carraro India IPO is 21 shares.
Q6. What is the expected listing gain for Carraro India IPO?
The Grey Market Premium (GMP) of the Carraro India IPO stands at ₹0, suggesting no anticipated listing gain.
Q7. Who are the lead managers of Carraro India IPO?
The lead managers of this IPO are Axis Capital Limited, BNP Paribas and Nuvama Wealth Management Limited.
Q8. How to apply for the Carraro India IPO?
You can apply for the Carraro India IPO online through ASBA via your bank account. Alternatively, you can apply via UPI through your stockbroker or submit an offline application form through your broker. The deadline for submitting IPO applications is December 24, 2024.
Q9. How to apply for the Carraro India IPO through Angel One?
To apply for the Carraro India IPO through Angle One, first Log in to the Angel One application with your credentials. Select the IPO. You will see the IPO Name “Carraro India IPO”. Click on the Bid button. Confirm your Application. Now go to your UPI app or Net Banking or BHIM app to approve the mandate.
Q10. How to apply for the Carraro India IPO through 5 Paisa?
To apply for the Carraro India IPO through 5 Paisa. First, log in to the 5 Paisa application with your credentials. Select the IPO. You will see the IPO Name “Carraro India IPO”. Click on the Bid button. Confirm your Application. Now go to your UPI app or Net Banking or BHIM app to approve the mandate.
Q11. How to apply for the Carraro India IPO through Upstox?
Log in to the Upstox application with your credentials. Select the IPO. You will see the IPO Name “Carraro India IPO”. Click on the Bid button. Confirm your Application. Now go to your UPI app or Net Banking or BHIM app to approve the mandate.
Q12. How to apply for the Carraro India IPO through IIFL?
Log in to the IIFL application with your credentials. Select the IPO. You will see the IPO Name “Carraro India IPO”. Click on the Bid button. Confirm your Application. Now go to your UPI app or Net Banking or BHIM app to approve the mandate.
