The Indian stock market is buzzing with excitement as Kross Limited gears up for its Initial Public Offering (IPO). Set to open on September 9, 2024, the auto parts manufacturer is offering shares priced between ₹228 and ₹240. Let’s dive into all the essential details you need to know about this upcoming Kross IPO.
What is Kross Limited?
Kross Limited, formerly known as Kross Manufacturers (India) Private Limited, is a leading player in the manufacturing of trailer axles and suspension assemblies. The company is also involved in the production of various high-performance, safety-critical components for medium and heavy commercial vehicles (M&HCV) and farm equipment.
Founded in 1991, Kross has grown significantly over the past few decades. With five manufacturing facilities located in Jamshedpur, Jharkhand, the company produces a wide range of forged and precision-machined parts used by major Original Equipment Manufacturers (OEMs). The company’s prominent clients include industry leaders like Ashok Leyland and Tata International DLT Private Limited.
Kross IPO Details: Key numbers to know
Kross Limited aims to raise ₹500 crore through this IPO. The offering is a combination of a fresh issue of 1.04 crore shares, amounting to ₹250 crore, and an Offer for Sale (OFS) by the promoters, totaling ₹250 crore. Promoters Sudhir Rai and Anita Rai will be offloading shares worth ₹168 crore and ₹82 crore, respectively.
The IPO will be available for subscription from September 9 to September 11, 2024, with anchor bidding starting on September 6. The share allotment is expected to be finalized on September 12, and refunds will be initiated on September 13. Kross shares will tentatively list on the BSE and NSE on September 16, 2024.
Here’s a breakdown of the price band and share distribution:
| Details | Values |
| Price Band | ₹228 – ₹240 per share |
| Total Issue Size | 20,833,334 shares |
| Fresh Issue | 1.04 crore shares (₹250 crore) |
| Offer for Sale | 1.04 crore shares (₹250 crore) |
| Minimum Lot Size | 62 shares |
| Retail Investor Investment | ₹14,880 (1 lot) |
| sNII Investment | ₹208,320 (14 lots) |
| bNII Investment | ₹1,011,840 (68 lots) |
Purpose of the IPO
Kross Limited plans to use the net proceeds from the IPO to fund several business requirements, including:
- Purchase of Machinery and Equipment: ₹70 crore will be used to upgrade the company’s production capabilities.
- Working Capital: ₹30 crore will be allocated to meet the company’s working capital needs.
- Debt Repayment: ₹90 crore will be directed toward repaying outstanding borrowings.
- General Corporate Purposes: The remaining funds will be used for corporate expenses and future growth.
Company Financials and Performance
Kross Limited has demonstrated solid financial growth in recent years. The company’s revenue increased by 27%, and its profit after tax (PAT) rose by an impressive 45% between the fiscal years ending March 31, 2023, and March 31, 2024.
Here’s a snapshot of Kross Limited’s financials:
| Financials (₹ Crore) | FY24 | FY23 |
| Assets | 352 | 250.57 |
| Revenue | 621.46 | 489.36 |
| Profit After Tax | 44.88 | 30.93 |
| Net Worth | 146.81 | 102.11 |
| Reserves and Surplus | 119.76 | 88.58 |
| Total Borrowing | 117.9 | 88.26 |
The company’s Return on Equity (ROE) stands at an impressive 30.57%, while the Return on Capital Employed (ROCE) is 28.15%. With a market capitalization of ₹1,548.23 crore post-IPO, Kross Limited is poised for significant growth.
How to Participate in the Kross IPO
Retail investors can bid for a minimum of one lot, which consists of 62 shares, requiring a minimum investment of ₹14,880. For sNII (Small Non-Institutional Investors), the minimum lot size is 14 lots (868 shares), amounting to ₹208,320. For bNII (Big Non-Institutional Investors), the minimum lot size is 68 lots (4,216 shares), amounting to ₹1,011,840.
The issue has been divided into three categories:
| Investor Category | Shares Offered |
| QIB (Qualified Institutional Buyers) | Not more than 50% of the Net offer |
| Retail Investors | Not less than 35.03% of the Net Issue |
| NII (Non-Institutional Investors) | Not less than 15% of the Offer |
The IPO is being managed by Equirus Capital Private Limited, and Kfin Technologies Limited is acting as the registrar.
Why Should You Consider Investing?
Kross Limited has established itself as a key player in the trailer axle and suspension assembly market, a rapidly growing industry in India. The company has long-term relationships with major OEMs and is well-positioned to benefit from the increasing demand for M&HCVs and agricultural equipment.
With its strong financial performance and solid growth prospects, Kross offers an attractive investment opportunity. The funds raised through this IPO will further strengthen the company’s production capabilities, reduce its debt, and support its expansion plans.
Additionally, the IPO price band of ₹228 to ₹240 per share offers a reasonable entry point for investors looking to capitalize on the company’s future growth.
Conclusion: Should You Invest in Kross Ltd IPO?
Kross Limited’s IPO presents an exciting opportunity for investors, especially given its strong financials, established market position, and growth potential. The company’s focus on high-performance, safety-critical parts for M&HCVs and farm equipment gives it a competitive edge in the auto parts industry.
However, as with any investment, it’s essential to consider your risk appetite and long-term investment goals before diving in. If you’re looking for a solid growth story in the auto parts sector, Kross Limited might be a worthwhile addition to your portfolio.
