Carraro India Limited, a prominent manufacturer of transmission systems and components for off-highway vehicles, is set to launch its Initial Public Offering (IPO) on December 20, 2024.
The Carraro India IPO is structured as a book built issue of Rs 1,250 crores, entirely as an offer for sale of 1.78 crore shares. With a price band set at Rs 668-704 per share, the issue will remain open for subscription until December 24, 2024.
Carraro India IPO Details
| IPO Detail | Information |
|---|---|
| Company Name | Carraro India Limited |
| IPO Date | December 20, 2024 to December 24, 2024 |
| Listing Date | December 30, 2024 |
| Face Value | ₹10 per equity share |
| Price Band | ₹668 to ₹704 per equity share |
| Lot Size | 21 equity shares |
| Issue Size | Up to 1,77,55,680 equity shares aggregating up to ₹1,250 crore |
| Offer Type | 100% Offer for Sale by Carraro International S.E. |
| Listing At | BSE and NSE |
| Pre-Issue Shareholding | Promoters: 100% |
| Post-Issue Shareholding | Promoters: [•]% |
| DRHP Date | August 23, 2024 |
Carraro India IPO Timeline
| PO Open Date | Friday, December 20, 2024 |
| IPO Close Date | Tuesday, December 24, 2024 |
| Basis of Allotment | Thursday, December 26, 2024 |
| Initiation of Refunds | Friday, December 27, 2024 |
| Credit of Shares to Demat | Friday, December 27, 2024 |
| Listing Date | Monday, December 30, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on December 24, 2024 |
The Carraro India IPO is structured as a pure offer for sale (OFS) by the promoter selling shareholder, Carraro International S.E. The company has set the price band at ₹668 to ₹704 per equity share, with a face value of ₹10 each. Investors can bid for a minimum of 21 shares in one lot, with the retail application amount capped at ₹2 lakh.
Key dates for the IPO are as follows:
- Anchor Investor Bidding: December 19, 2024
- IPO Opening Date: December 20, 2024
- IPO Closing Date: December 24, 2024
- Basis of Allotment: December 26, 2024
- Initiation of Refunds: December 27, 2024
- Credit of Shares to Demat Account: December 27, 2024
- Listing Date: December 30, 2024
The issue size comprises up to 1,77,55,680 equity shares, with the following reservation for investors:
- Qualified Institutional Buyers (QIBs): Not more than 50% of the offer
- Non-Institutional Investors (NIIs): Not less than 15% of the offer
- Retail Individual Investors (RIIs): Not less than 35% of the offer
About Carraro India
Incorporated on April 11, 1997, Carraro India Limited is a subsidiary of Carraro International S.E., Italy. The company has established itself as a leading independent Tier 1 supplier in the Indian market, catering to major OEMs in the agricultural and construction vehicle sectors.
Carraro India operates two manufacturing facilities in Pune, Maharashtra, producing a wide range of products including:
- Axles and transmission systems for agricultural tractors and construction vehicles
- Gears, shafts, and ring gears for industrial and automotive applications
The company’s journey in India began with a joint venture with Escorts Ltd in 1997, followed by the establishment of a second plant for gear and component production. Over the years, Carraro India has acquired full ownership of its manufacturing facilities, solidifying its presence in the Indian market.
Business Model and Competitive Advantages
Carraro India’s business model revolves around its expertise in developing complex engineering products and solutions for OEM customers. As an independent Tier 1 solution provider, the company supports the full value chain of services with in-house R&D and manufacturing capabilities.
Key competitive advantages include:
- Strong technological capabilities and in-house R&D
- Long-standing relationships with major OEMs
- Diverse product portfolio catering to both agricultural and construction sectors
- Integrated manufacturing facilities in Pune
- Global presence through the Carraro Group network
Financial Performance
Statement of assets and liabilities
| Particulars | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 |
|---|---|---|---|
| ASSETS | |||
| Total non-current assets | 3,958.81 | 3,494.05 | 3,301.28 |
| Total current assets | 6,605.05 | 6,962.87 | 6,603.10 |
| TOTAL ASSETS | 10,563.86 | 10,456.92 | 9,904.38 |
| EQUITY & LIABILITIES | |||
| Total equity | 3,851.85 | 3,458.73 | 3,027.70 |
| Total non-current liabilities | 1,672.36 | 1,739.69 | 1,233.77 |
| Total current liabilities | 5,039.65 | 5,258.50 | 5,642.91 |
| TOTAL EQUITY AND LIABILITIES | 10,563.86 | 10,456.92 | 9,904.38 |
(All figures in ₹ million)
- Total assets increased from ₹9,904.38 million in FY 2022 to ₹10,563.86 million in FY 2024, showing steady growth.
- Non-current assets grew consistently, while current assets fluctuated slightly over the three-year period.
- Total equity rose from ₹3,027.70 million in FY 2022 to ₹3,851.85 million in FY 2024, indicating improved financial strength.
- Current liabilities decreased from FY 2022 to FY 2024, while non-current liabilities increased, suggesting a shift in the company’s debt structure.
- The company maintained a balanced asset-liability structure throughout the period, with total assets matching total equity and liabilities each year.
Statement of profit and loss
| Particulars | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|
| Revenue from operations | 17,704.54 | 16,951.17 | 14,815.62 |
| Total income | 17,876.33 | 17,149.60 | 15,035.42 |
| Total expenses | 17,059.12 | 16,515.76 | 14,750.32 |
| Profit before tax | 817.21 | 633.84 | 285.10 |
| Total tax expense | 211.40 | 165.83 | 77.41 |
| Profit after tax | 605.81 | 468.01 | 207.69 |
| Other comprehensive income, net of tax | 7.31 | 13.02 | (27.67) |
| Total comprehensive income | 613.12 | 481.03 | 180.02 |
| Basic EPS (in ₹) | 10.66 | 8.23 | 3.65 |
| Diluted EPS (in ₹) | 10.66 | 8.23 | 3.65 |
(All figures in ₹ million, except EPS)
- Revenue from operations showed steady growth, increasing from ₹14,815.62 million in FY 2022 to ₹17,704.54 million in FY 2024.
- Profit before tax more than doubled from ₹285.10 million in FY 2022 to ₹817.21 million in FY 2024.
- Profit after tax nearly tripled from ₹207.69 million in FY 2022 to ₹605.81 million in FY 2024.
- Total comprehensive income increased significantly from ₹180.02 million in FY 2022 to ₹613.12 million in FY 2024.
- Earnings per share (both basic and diluted) showed substantial improvement, rising from ₹3.65 in FY 2022 to ₹10.66 in FY 2024.
Statement of cash flows in table format:
| Particulars | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|
| Net cash from operating activities | 1,067.26 | 723.81 | 888.71 |
| Net cash used in investing activities | (849.15) | (618.12) | (584.90) |
| Net cash from/(used in) financing activities | (177.59) | (124.18) | 107.11 |
| Net increase/(decrease) in cash and cash equivalents | 40.52 | (18.49) | 410.92 |
| Cash and cash equivalents at beginning of year | 950.88 | 988.93 | 582.35 |
| Effect of exchange rate changes | 12.85 | (19.56) | (4.34) |
| Cash and cash equivalents at end of year | 1,004.25 | 950.88 | 988.93 |
(All figures in ₹ million)
Key observations:
- Operating activities consistently generated positive cash flow, with a significant increase in FY 2024.
- Investing activities show continued capital expenditure, with increased outflows in FY 2024.
- Financing activities shifted from net cash inflow in FY 2022 to net outflows in FY 2023 and FY 2024, primarily due to dividend payments and debt repayments.
- Despite fluctuations, the company maintained a strong cash position, ending FY 2024 with ₹1,004.25 million in cash and cash equivalents.
- The company demonstrated effective cash management, balancing investments in growth with maintaining liquidity.
Industry Overview
The global and Indian off-highway markets, encompassing construction vehicles and agricultural equipment (including tractors), are projected to experience significant growth. According to the Markets and Markets Report:
- Global sales of construction vehicles and agricultural tractors are expected to increase from 3,560,000 units in CY2023 to 4,640,000 units by CY2029.
- The agricultural tractors volume in India grew at a CAGR of 5.9% from 804,000 units in CY2019 to 1,011,000 units in CY2023.
- Sales volume of construction vehicles in India increased at a CAGR of 4.2% from 92,000 units in CY2019 to 109,000 units in CY2023 and is expected to grow at a CAGR of 5.0% from CY2024 to CY2029.
This growth trajectory in both domestic and global markets presents significant opportunities for Carraro India to expand its business and market share.
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Objectives of the Offer
The primary objectives of the Carraro India IPO are:
- To carry out the offer for sale of equity shares by the promoter selling shareholder
- To achieve the benefits of listing the equity shares on the stock exchanges
It’s important to note that the company will not receive any proceeds from the offer, as it is entirely an offer for sale by the promoter.
Promoters and Management
The promoters of Carraro India are:
- Tomaso Carraro
- Enrico Carraro
- Carraro S.p.A.
- Carraro International S.E.
Key management personnel include:
- Ettore Francesco Sequi (Chairman)
- Davide Grossi (Whole-time Director and Chief Financial Officer)
- Jui Bhargave (Company Secretary and Compliance Officer)
Risks and Concerns
Potential investors should consider the following key risk factors:
- High customer concentration: In FY2024, the top 5 and top 10 customers accounted for 70.10% and 86.29% of revenue, respectively.
- Dependence on Carraro Group: The company relies on other entities in the Carraro Group for brand licensing, customer sourcing, and R&D support.
- Related party transactions: Significant transactions with Carraro Group entities may impact financial performance.
- Product quality risks: Any defects in products or after-sales services could adversely affect reputation and sales.
- Manufacturing concentration: All production is currently carried out at the Pune facilities, making the company vulnerable to local disruptions.
- Seasonal nature of agricultural business: Sales may fluctuate due to the seasonal demand for agricultural equipment.
- Raw material price volatility: Fluctuations in input costs could impact profitability.
Carraro India IPO Lot Size
nvestors can bid for a minimum of 21 shares and in multiples thereof. The below table depicts the minimum and maximum investment by retail investors and HNI in terms of shares and amount.
| Application | 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 Limited Contact Details | Carraro India IPO Registrar |
| Carraro India Limited B2/ 2 MIDC, Ranjangaon, Pune 412 220 Maharashtra, Phone: +91 2138 662666 Email: company_secretary@carraroindia.com Website: https://www.carraroindia.com/ | Link Intime India Private Ltd Phone: +91-22-4918 6270 Email: carraro.ipo@linkintime.co.in Website: https://linkintime.co.in/Initial_Offer/public-issues.html |
