Indo Farm Equipment Lists at 20% Premium, Shows Strong Momentum on BSE & NSE

Indo Farm Equipment Limited, an integrated manufacturer of tractors and construction equipment operating since 1994, marked a strong entry into the public markets on Tuesday, 7th January 2025. The company, which has established itself with a diverse portfolio of tractors (16-110 HP) and pick & carry cranes (9-30 tons) at its 127,840 sq. meter facility in Baddi, commenced trading on both BSE and NSE amid robust investor enthusiasm.

Indo Farm Listing Details

The company's market debut reflected strong investor confidence in its business model and growth prospects:

• Listing Time & Price: When trading commenced at market open, Indo Farm Equipment shares debuted at ₹258.40 on BSE and ₹256 on NSE, delivering impressive premiums of 20.19% and 19.07% respectively to IPO investors. This strong opening validates the market's recognition of the company's integrated manufacturing capabilities and expansion plans.
• Issue Price Context: The considerable premium emerged after the company had strategically priced its IPO between ₹204 and ₹215 per share, ultimately fixing the final issue price at ₹215. This pricing approach successfully balanced institutional investor accessibility with fair value for the company's growth potential.
• Price Evolution: By 10:52 AM IST, investor enthusiasm continued to build, pushing the stock to ₹282.80, representing an outstanding gain of 31.53% over the issue price, after touching an intraday high of ₹286.90, demonstrating sustained buying interest throughout the early trading session.
   

Indo Farm First-Day Trading Performance 

The trading activity showed robust participation and strong investor conviction:

• Volume and Value: Within just the first few hours, 16.85 lakh shares changed hands, generating a substantial turnover of ₹46.09 crore. Notably, 54.87% of traded shares were marked for delivery, indicating a healthy mix of investment and trading interest.
• Demand Dynamics: The stock's trading pattern showed continued strength with buy orders for 1.30 lakh shares against sell orders for 2.55 lakh shares, reflecting balanced participation at higher levels.
   

Indo Farm Market Sentiment and Analysis

• Market Reaction: Strong opening followed by further upward momentum
• Subscription Rate: The Indo Farm IPO was massively oversubscribed by 227.67 times, with NIIs leading at 501.75 times subscription, followed by QIBs at 242.4 times, and retail investors at 101.79 times
• Pre-listing Interest: Anchor investors demonstrated strong confidence by investing ₹78.05 crore before the public issue
   

Indo Farm Growth Drivers and Challenges

Expected drivers of future performance:

• Fully integrated manufacturing setup
• Experienced management team
• In-house NBFC subsidiary
• Wide product range
• Strong multi-country presence

Potential challenges:

• High debt-to-EBITDA ratio of 18.82
• Static recent financial performance
• Competitive market dynamics
• Working capital intensity

Utilisation of IPO Proceeds 

The ₹260.15 crore raised will be used for:

• New pick & carry cranes manufacturing unit
• Debt repayment
• Investment in Barota Finance subsidiary
• General corporate purposes
• Note: ₹75.25 crore will go to selling shareholders as OFS proceeds

Indo Farm Financial Performance 

The company has shown steady results:

• Revenue increased marginally by 1% to ₹375.95 crore in FY2024 from ₹371.82 crore in FY2023
• Q1 FY2025 (ended June 2024) showed revenue of ₹75.54 crore with PAT of ₹2.45 crore
• Moderate financial metrics with ROE of 5.13% and ROCE of 8.96%

As Indo Farm Equipment begins its journey as a listed entity, market participants will closely monitor its ability to execute expansion plans and improve operational metrics. The strong listing and sustained momentum suggest robust investor confidence in the company's prospects in the agricultural equipment sector, particularly given its integrated manufacturing capabilities and plans to significantly expand its crane manufacturing capacity by 3,600 units annually.