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Carraro India Ltd

Carraro India Ltd IPO

Status: Current

Overview

IPO date
20 Dec 2024 to 24 Dec 2024
Face value
₹ 10 per share
Price
₹ 668 to ₹704 per share
Issue Size
17,755,682 shares
(aggregating up to ₹ 1250 Cr)
Allotment Date
26 Dec 2024
Listing at
NSE
Issue type
Book Building
Sector
Auto Ancillaries

Objectives of Carraro India Ltd IPO

Initial public offering of [*] equity shares bearing face value of Rs. 10 each (the "Equity Shares") of Carraro India Limited (the "Company" or "Issuer") for cash at a price of Rs. [*] per equity share (the "Offer Price") aggregating up to Rs. 1250.00 crores (the "Offer") comprising an offer for sale of [*] equity shares aggregating up to Rs. 1250.00 crorse by Carraro International S.E. (the "Promoter Selling Shareholder", and such offer for sale, the "Offer for Sale", and such equity shares, the "Offered Shares"). The offer would constitute [*]% of the post-offer paid-up equity share capital of the company. Price Band: Rs. 668 to Rs. 704 per equity share of face value of Rs. 10 each. The Floor price is 66.80 times the face value of the equity shares and cap price is 70.40 times the face value of the equity shares. Bid can be made for a minimum of 21 equity shares and in multiples of 21 equity shares.

Carraro India Ltd IPO Strategy

  • Maintain our strong positioning in axles and transmission systems with an aim to secure market position.
  • Drive our growth through introduction of new products and product application innovation.
  • Develop future-ready solutions for emerging technologies and potential entry into new market segments.
  • Enhance and expand our production capabilities in India.
  • Increase share of localization and further improving efficiencies of our supply chain.

About Carraro India Ltd

Carraro India Limited was incorporated as 'Carraro India Private Limited' on April 11, 1997, as a Private Limited Company issued by the Registrar of Companies, Delhi. Pursuant to allotment of Equity Shares by the Company, the Board passed a resolution on September 30, 1997, wherein Company became a deemed public company, and the name was changed to 'Carraro India Limited' with effect from September 3, 1997, pursuant to a Certificate of Incorporation endorsed by the RoC, Delhi to that effect. Subsequently, the Company was re-converted into a Private Limited Company and the name was changed to 'Carraro India Private Limited', dated March 16, 2009 issued by the RoC. Subsequently, on the conversion of Company to a Public Limited Company, the Company name was changed to 'Carraro India Limited' and a fresh Certificate of Incorporation dated August 12, 2024 was issued by the RoC. The Company is a technology driven integrated supplier that develops complex engineering products and solutions for OEM customers. It provide a diverse products including axles and transmission systems of different HP ranges for off-highway vehicles in the agricultural tractor and construction vehicle sectors, as well as gears, shafts and ring gears for industrial and automotive vehicles. The Company is engaged in manufacture of mechanical transmissions, clutches, hydraulic lifts and planetary drives, axles for agricultural tractors and construction equipment including components, parts and spares thereof. The Company has its manufacturing facilities located in Ranjangaon at Pune. Pursuant to Scheme of Amalgamation approved by the High Court at Judicature at Bombay vide its order dated August 28, 2014, Turbo Gears India Private Limited (TGIPL) , the fellow subsidiary got merged with the Company w.e.f. April 1, 2013. In terms of the said Scheme of of Amalgamation, erstwhile shareholders of Turbo Gears, namely, Carraro Drive Tech S.p.A. and Siap S.p.A., were allotted 0.06 Equity Shares bearing face value of Rs 10 each of the Company for every 1 fully paid-up equity share bearing face value of Rs 10 each held by such shareholder in Turbo Gears. Accordingly, 5,759,994 Equity Shares and 6 Equity Shares were allotted to Carraro Drive Tech S.p.A. and Siap S.p.A., respectively, as consideration for the amalgamation. In 2016, the Company launched steering axle applicable for 4-WD vehicle; launched steering portal axle in 2022, and T135 transmission system launched in 2023. The Company acquired 99% shareholding in Carraro Technologies India Private Limited and it has become a subsidiary of the Company, with effect from June 28, 2024. The Company is planning an IPO to raise capital from public aggregating upto Rs 1811.65 Crore Equity Shares through Offer for Sale.

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T&C*

Strengths vs Risks of Carraro India Ltd

Know the pros & cons

Strengths

  • arrowOne of the leading tier 1 suppliers of transmissions systems and a key supplier of axles in the agricultural tractor and construction vehicle industries in India with competitive moat for mission critical and complex driveline components.
  • arrowCustomer-centric, one-stop shop offering customized solutions to a longstanding OEM customer base.
  • arrowLongstanding relationships with marquee local and international supplier base.
  • arrowStrong, in-house R&D capabilities with proprietary IP rights to facilitate innovation of future-ready products.
  • arrowTechnologically advanced manufacturing plants with large production capacities.
  • arrowStable and experienced senior management team with strong industry knowledge and proven track record of growing the business and achieving margin optimization.

Risks

  • arrowThe company derived 69.55% and 87.88% of its revenue in the six months ended September 30, 2024 and 69.37% and 85.39% of its revenue in Fiscal 2024 from the company top five and top 10 customers, respectively, and any inability to retain its key customers or attract new customers and expand the company customer network, could negatively affect its business and results of operations.
  • arrowThe company depends partially on other entities in the Carraro Group for its operations, such as the license of the Carraro brand, customer sourcing, procurement, R&D and general support of the company operations. The Carraro Group was its largest customer in the six months ended September 30, 2024 and 2023 and Fiscals 2024, 2023 and 2022. For the six months ended September 30, 2024 and Fiscal 2024, the company derived 33.27% and 33.91% of its total revenue from the Carraro Group and have purchased 3.81% and 4.91% of its raw materials from the Carraro Group, respectively. Any disruption in this relationship could have a material adverse impact on its operations.
  • arrowThe company has entered into and may continue to enter into related party transactions with the Carraro Group, Directors and Key Managerial Personnel. The company incurred 33.89% and 34.67% of its total income and 6.70% and 8.63% of the company total expenses in transactions with related parties in the six months ended September 30, 2024 and Fiscal 2024, respectively. Such transactions may require significant capital outlay and there can be no assurance that the company will be able to make a return on these transactions or investments.
  • arrowIts agricultural tractor business is seasonal in nature and a decrease in its sales during some quarters could have an adverse impact on the company financial performance.
  • arrowThe company and certain of its Group Companies have common pursuits as they are engaged in similar business or segments within the automotive components industry and may compete with it, and that there may be conflict of interest in allocating business opportunities between the company and such Group Companies.
  • arrowIts Promoters and certain of the company Directors may be involved in ventures which are engaged in the same line of activity or business as that of the Company and this may result in conflicts of interest with it. The company Directors, Key Managerial Personnel and Senior Management may have interests in the Company in addition to their remuneration and reimbursement of expenses.
  • arrowThe company is dependent on the performance of the tractor and construction vehicle markets, as its agricultural tractors sector and construction vehicles sector constituted 45.05% and 41.29% of its revenue from product sector only for Fiscal 2024, 49.37% and 38.43% of the company revenue for Fiscal 2023 and 50.59% and 36.12% of its revenue for Fiscal 2022, respectively. Any adverse changes in the conditions affecting the tractor or construction vehicles markets can adversely impact its business, financial condition, results of operations, cash flows and prospects.
  • arrowIts EBITDA margins and PAT margins were lower than the EBITDA margins and PAT margins of the company industry peers in the six months ended September 30, 2024 and September 30, 2023 and Fiscals 2024, 2023 and 2022, as disclosed in this Red Herring Prospectus, and the company cannot assure you that its will be able to continue to improve the company EBITDA margins and PAT margins in comparison to its competitors or at all.
  • arrowThe company currently manufacture its axles, transmissions and gears at the company manufacturing plants in Pune, India. Any disruptions or stoppages at its manufacturing plants could adversely impact the company operations, financial condition and results of operations.
  • arrowAs the company derives 34.60%, 36.09%, 35.87%, 38.19% and 36.80% of its revenue from exports from the six months ended September 30, 2024 and 2023 and Fiscals 2024, 2023 and 2022, respectively, the company heavily rely on its extensive global customer base of OEM customers and the company inability to maintain the stability of its OEM customer base and attract additional customers may have a material adverse effect on its results of operations and financial condition.
  • arrowThe Company, its Subsidiary and the company Promoters are involved in outstanding legal proceedings and any adverse outcome in any of these proceedings may adversely impact its business, reputation, financial condition and results of operations.
  • arrowIts warranty reserves may be insufficient to cover future warranty claims, which could adversely affect its financial condition and results of operations.
  • arrowThe company is subject to strict quality requirements and any product defect issues or failures by it or the company raw material suppliers to comply with quality standards may lead to the cancellation of existing and future orders, recalls or exposure to potential product liability claims.
  • arrowThe examination report on the Restated Consolidated Financial Information discloses an emphasis of matter for the financial years ended March 31, 2024, 2023 and 2022. Further, audit reports on its audited financial statements include certain adverse remarks and observations required to be disclosed under the Companies (Auditor's Report) Order, 2020 as of and for Fiscals 2024, 2023 and 2022, and the company cannot assure that its financial information for future periods will not contain emphasis of matters, adverse remarks or observations.
  • arrowThe company may be negatively impacted by any early obsolescence of its manufacturing equipment and the spare parts or software used in such equipment.
  • arrowIts agricultural tractor business may be susceptible to changes in climate and weather pattern, which could have an adverse impact on its financial performance.
  • arrowThe Company has a high working capital requirement and had total borrowings of Rs.1,957.77 million, Rs.2,125.46 million, Rs.1,883.30 million and Rs.1,781.38 million as of September 30, 2024, March 31, 2024, March 31, 2023 and March 31, 2022, respectively and a net working capital turnover ratio of 4.20, 6.35, 12.87, 10.63 and 17.87 for the six months ended September 30, 2024 and 2023 and Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively. If the company is unable to comply with repayment and other covenants in its financing agreements, the company's business, financial condition, cash flows and credit rating could be adversely affected.
  • arrowIts may not be able to compete successfully in the highly competitive and fast evolving agricultural tractor and construction vehicle markets.
  • arrowThe company has had negative cash flows in the past and may continue to have negative cash flows in the future.
  • arrowThe company has certain contingent liabilities that have not been provided for in its Restated Consolidated Financial Information, which if materialize, may adversely affect its financial condition.
  • arrowAny defects in its axles, transmissions, gears or after-sales services may adversely impact the company reputation and ability to sell its products, result in claims for damages and even lead to product recalls or similar actions, which could have an adverse impact on its operations.
  • arrowDisruptions of transportation network and transportation infrastructure or deficiencies in service provided by its logistic service providers may have an adverse effect on the company's business and results of operations.
  • arrowThe company depends on its supplier base of 220 suppliers in India and 58 suppliers internationally for raw materials, parts and other materials as of September 30, 2024. Any interruption in the availability of raw materials, parts and other materials, or any disruption, breakdown or shutdown of its suppliers or any instability of the company supplier base could adversely impact its operations.
  • arrowIncreases in the prices of, or the company failures to obtain raw materials, parts and other materials required for its operations could adversely affect the company business and results of operations.
  • arrowIts future success depends on the company ability to identify market trends, innovate and meet evolving customer demands and preferences profitably. If the company is unable to do so, its sales, business and results of operations would be adversely affected.
  • arrowThe company may be unable to adequately protect its intellectual property rights and may be subject to intellectual property infringement claims, either of which may substantially harm its business.
  • arrowErrors in forecasting demand for its axles, transmissions and gears could result in the misallocation of production capacity which, in turn, could lead to decreased efficiency, increased cost and lost opportunities.
  • arrowThe company derives 34.60%, 36.09%, 35.87%, 38.19% and 36.80% of its revenue from exports from the six months ended September 30, 2024 and September 30, 2023 and Fiscals 2024, 2023 and 2022, respectively. Its global operations involve challenges and risks that could increase its expenses, adversely affect its results of operations and require increased time and attention from the company management.
  • arrowThe company is unable to trace some of its historical records including forms filed with the RoC, and certain of its forms are undated and/ or unstamped and/or have factual discrepancy. Further, the company has delayed in making certain regulatory filings required to be made with the RBI under applicable law. The company cannot assure you that regulatory proceedings or actions will not be initiated against it in the future and that the company will not be subject to any penalty imposed by the competent regulatory authority in this regard.
  • arrowIts sales volumes are subject to fluctuations and are dependent on the end customers' demands. Any loss of customer relationship could have an adverse impact on its reputation, business, results of operations and financial condition.
  • arrowThe company may not be successful in implementing its growth strategy, which may have an adverse impact on its reputation, business, prospects, results of operations and financial condition.
  • arrowThe company or the Carraro Group may not succeed in continuing to establish, maintain and strengthen the "Carraro" brand and the "Carraro" brand could be harmed by complaints and negative publicity, in India and globally, which could have an adverse impact on its reputation, business, results of operations and financial condition.
  • arrowThe company is exposed to risks in connection with the potential failure or non-performance of distributors or authorized dealers that provide after-sales services to its customers.
  • arrowThe company requires certain approvals and licenses in the ordinary course of business and are subject to costs, risks and uncertainties, including those associated with laws and regulations in domestic and foreign jurisdictions in which the company operates, and the failures to obtain or retain them in a timely manner may materially adversely affect its operations.
  • arrowThe company is subject to substantial government regulations, which are subject to change, and the failures to comply with such regulations may materially adversely affect its operations.
  • arrowFailures or disruption of the company information technology systems may adversely affect its business, financial condition, results of operations, cash flows and prospects.
  • arrowIts business depends on adequate and uninterrupted availability of power, fuel and water, and any disruption to power or water sources could increase its production costs and may have an adverse impact on the company operations.
  • arrowIts business depends substantially on the continued efforts of the company management including its Key Managerial Personnel and the company Senior Management and other qualified personnel, and its operations may be disrupted if the company lose their services.
  • arrowAs of September 30, 2024, the company engaged 39 contractors and 635 contractual temporary employees in its production processes, and their failures to complete the project on time or at all may adversely affect its business and profitability.
  • arrowIts may not realize the anticipated benefits of existing or future strategic alliances, acquisitions, divestitures, or business strategies.
  • arrowThe company has used information from the Markets and Markets Report which its commissioned for industry related data in this Red Herring Prospectus and any reliance on such information is subject to inherent risks.
  • arrowChanges in tax laws may materially and adversely affect its business, prospects, financial condition, results of operations and cash flows.
  • arrowThe company requires significant capital, and may need to seek additional financing to support our growth strategies. Any failures to raise additional financing could have an adverse effect on its business, results of operations, financial condition and cash flows.
  • arrowForeign exchange rate fluctuations can adversely affect its financial results due to sales and expenses in different currencies and the value of the company Equity Shares.
  • arrowIts business strategy and competitive position are heavily dependent on the success of its R&D activities and failures to achieve successful innovations would have an adverse impact on the company growth, business and financial condition.
  • arrowThe company relies primarily on third-party insurance policies to insure its operations- related risks. If the company insurance coverage is inadequate, it may have an adverse effect on its business, financial condition and results of operations.
  • arrowIf the company fails to maintain an effective system of internal controls, its may not be able to successfully manage, or accurately report, the company financial risks. Despite its internal control systems, the company may be exposed to operational risks, including internal or external fraud or misconduct by its employees or other third parties, which could adversely affect its reputation and our results of operations.
  • arrowThe company is subject to anti-corruption, anti- bribery, anti-money laundering, financial and economic sanctions and similar laws, and non-compliance with such laws can subject it to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could adversely affect its business, prospects, financial condition, results of operations, and cash flows.
  • arrowThe company may be subject to unionization, work stoppages or increased labor costs, which could adversely affect its business and results of operations.
  • arrowThe company regularly work with hazardous substances and activities in its operation which can be dangerous and could cause injuries to people or property.
  • arrowIts ability to pay dividends in the future will depends on the company earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.
  • arrowIts may be unable to renew the company existing leases or secure new leases for its existing offices.
  • arrowThe company track certain operational metrics and non-GAAP measures for our operations. Certain of its operational metrics are subject to inherent challenges in measurement and any real or perceived inaccuracies in such metrics may adversely affect its business and reputation.
  • arrowThe company is entitled to certain tax benefits. These tax benefits are available for a definite period of time, which, on expiry or if withdrawn prematurely, may adversely affect its business, financial condition, results of operations, cash flows and prospects.
  • arrowIf the company is classified as a passive foreign investment company for U.S. federal income tax purposes, U.S. investors in Equity Shares may be subject to adverse U.S. federal income tax consequences.
  • arrowThe requirements of being a listed company may strain its resources which may have a material adverse impact on the company operations.

Carraro India Ltd Peer Comparison

Understand the company’s industry standing

Carraro India Ltd
Escorts Kubota Ltd
Schaeffler India Ltd
Face Value
10
10
2
Standalone / Consolidated
Consolidated
Consolidated
Consolidated
Total Income Rs. Cr.
---
---
---
EPS-Basis
11
96.8
57.5
EPS-Diluted
11
96.64
57.5
NAV Per Share
65.05
830.45
307.44
P/E-Basic EPS
---
43.21
74.22
P/E-Diluted EPS
---
---
---
RONW(%)
16.92
11.43
18.71
Latest NAV Period
---
---
---
Latest NAV
---
---
---
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The IPO opens on 20 Dec 2024 & closes on 24 Dec 2024.

Carraro India Limited was incorporated as 'Carraro India Private Limited' on April 11, 1997, as a Private Limited Company issued by the Registrar of Companies, Delhi. Pursuant to allotment of Equity Shares by the Company, the Board passed a resolution on September 30, 1997, wherein Company became a deemed public company, and the name was changed to 'Carraro India Limited' with effect from September 3, 1997, pursuant to a Certificate of Incorporation endorsed by the RoC, Delhi to that effect. Subsequently, the Company was re-converted into a Private Limited Company and the name was changed to 'Carraro India Private Limited', dated March 16, 2009 issued by the RoC. Subsequently, on the conversion of Company to a Public Limited Company, the Company name was changed to 'Carraro India Limited' and a fresh Certificate of Incorporation dated August 12, 2024 was issued by the RoC. The Company is a technology driven integrated supplier that develops complex engineering products and solutions for OEM customers. It provide a diverse products including axles and transmission systems of different HP ranges for off-highway vehicles in the agricultural tractor and construction vehicle sectors, as well as gears, shafts and ring gears for industrial and automotive vehicles. The Company is engaged in manufacture of mechanical transmissions, clutches, hydraulic lifts and planetary drives, axles for agricultural tractors and construction equipment including components, parts and spares thereof. The Company has its manufacturing facilities located in Ranjangaon at Pune. Pursuant to Scheme of Amalgamation approved by the High Court at Judicature at Bombay vide its order dated August 28, 2014, Turbo Gears India Private Limited (TGIPL) , the fellow subsidiary got merged with the Company w.e.f. April 1, 2013. In terms of the said Scheme of of Amalgamation, erstwhile shareholders of Turbo Gears, namely, Carraro Drive Tech S.p.A. and Siap S.p.A., were allotted 0.06 Equity Shares bearing face value of Rs 10 each of the Company for every 1 fully paid-up equity share bearing face value of Rs 10 each held by such shareholder in Turbo Gears. Accordingly, 5,759,994 Equity Shares and 6 Equity Shares were allotted to Carraro Drive Tech S.p.A. and Siap S.p.A., respectively, as consideration for the amalgamation. In 2016, the Company launched steering axle applicable for 4-WD vehicle; launched steering portal axle in 2022, and T135 transmission system launched in 2023. The Company acquired 99% shareholding in Carraro Technologies India Private Limited and it has become a subsidiary of the Company, with effect from June 28, 2024. The Company is planning an IPO to raise capital from public aggregating upto Rs 1811.65 Crore Equity Shares through Offer for Sale.

Carraro India Ltd IPO will close on 24 Dec 2024.

  • One of the leading tier 1 suppliers of transmissions systems and a key supplier of axles in the agricultural tractor and construction vehicle industries in India with competitive moat for mission critical and complex driveline components.
  • Customer-centric, one-stop shop offering customized solutions to a longstanding OEM customer base.
  • Longstanding relationships with marquee local and international supplier base.
  • Strong, in-house R&D capabilities with proprietary IP rights to facilitate innovation of future-ready products.
  • Technologically advanced manufacturing plants with large production capacities.
  • Stable and experienced senior management team with strong industry knowledge and proven track record of growing the business and achieving margin optimization.

S.No Promoters Name Pre Issue Shares Pre Issue Percentage Post Issue Shares Post Issue Percentage
1 Tomaso Carraro --- --- --- ---
2 Enrico Carraro --- --- --- ---
3 Carraro S.p.A 1 --- 1 ---
4 Carraro International S.E 56851531 99.99 39095849 68.77
5 Siap S.A 6 --- 6 ---

  • The company derived 69.55% and 87.88% of its revenue in the six months ended September 30, 2024 and 69.37% and 85.39% of its revenue in Fiscal 2024 from the company top five and top 10 customers, respectively, and any inability to retain its key customers or attract new customers and expand the company customer network, could negatively affect its business and results of operations.
  • The company depends partially on other entities in the Carraro Group for its operations, such as the license of the Carraro brand, customer sourcing, procurement, R&D and general support of the company operations. The Carraro Group was its largest customer in the six months ended September 30, 2024 and 2023 and Fiscals 2024, 2023 and 2022. For the six months ended September 30, 2024 and Fiscal 2024, the company derived 33.27% and 33.91% of its total revenue from the Carraro Group and have purchased 3.81% and 4.91% of its raw materials from the Carraro Group, respectively. Any disruption in this relationship could have a material adverse impact on its operations.
  • The company has entered into and may continue to enter into related party transactions with the Carraro Group, Directors and Key Managerial Personnel. The company incurred 33.89% and 34.67% of its total income and 6.70% and 8.63% of the company total expenses in transactions with related parties in the six months ended September 30, 2024 and Fiscal 2024, respectively. Such transactions may require significant capital outlay and there can be no assurance that the company will be able to make a return on these transactions or investments.
  • Its agricultural tractor business is seasonal in nature and a decrease in its sales during some quarters could have an adverse impact on the company financial performance.
  • The company and certain of its Group Companies have common pursuits as they are engaged in similar business or segments within the automotive components industry and may compete with it, and that there may be conflict of interest in allocating business opportunities between the company and such Group Companies.
  • Its Promoters and certain of the company Directors may be involved in ventures which are engaged in the same line of activity or business as that of the Company and this may result in conflicts of interest with it. The company Directors, Key Managerial Personnel and Senior Management may have interests in the Company in addition to their remuneration and reimbursement of expenses.
  • The company is dependent on the performance of the tractor and construction vehicle markets, as its agricultural tractors sector and construction vehicles sector constituted 45.05% and 41.29% of its revenue from product sector only for Fiscal 2024, 49.37% and 38.43% of the company revenue for Fiscal 2023 and 50.59% and 36.12% of its revenue for Fiscal 2022, respectively. Any adverse changes in the conditions affecting the tractor or construction vehicles markets can adversely impact its business, financial condition, results of operations, cash flows and prospects.
  • Its EBITDA margins and PAT margins were lower than the EBITDA margins and PAT margins of the company industry peers in the six months ended September 30, 2024 and September 30, 2023 and Fiscals 2024, 2023 and 2022, as disclosed in this Red Herring Prospectus, and the company cannot assure you that its will be able to continue to improve the company EBITDA margins and PAT margins in comparison to its competitors or at all.
  • The company currently manufacture its axles, transmissions and gears at the company manufacturing plants in Pune, India. Any disruptions or stoppages at its manufacturing plants could adversely impact the company operations, financial condition and results of operations.
  • As the company derives 34.60%, 36.09%, 35.87%, 38.19% and 36.80% of its revenue from exports from the six months ended September 30, 2024 and 2023 and Fiscals 2024, 2023 and 2022, respectively, the company heavily rely on its extensive global customer base of OEM customers and the company inability to maintain the stability of its OEM customer base and attract additional customers may have a material adverse effect on its results of operations and financial condition.
  • The Company, its Subsidiary and the company Promoters are involved in outstanding legal proceedings and any adverse outcome in any of these proceedings may adversely impact its business, reputation, financial condition and results of operations.
  • Its warranty reserves may be insufficient to cover future warranty claims, which could adversely affect its financial condition and results of operations.
  • The company is subject to strict quality requirements and any product defect issues or failures by it or the company raw material suppliers to comply with quality standards may lead to the cancellation of existing and future orders, recalls or exposure to potential product liability claims.
  • The examination report on the Restated Consolidated Financial Information discloses an emphasis of matter for the financial years ended March 31, 2024, 2023 and 2022. Further, audit reports on its audited financial statements include certain adverse remarks and observations required to be disclosed under the Companies (Auditor's Report) Order, 2020 as of and for Fiscals 2024, 2023 and 2022, and the company cannot assure that its financial information for future periods will not contain emphasis of matters, adverse remarks or observations.
  • The company may be negatively impacted by any early obsolescence of its manufacturing equipment and the spare parts or software used in such equipment.
  • Its agricultural tractor business may be susceptible to changes in climate and weather pattern, which could have an adverse impact on its financial performance.
  • The Company has a high working capital requirement and had total borrowings of Rs.1,957.77 million, Rs.2,125.46 million, Rs.1,883.30 million and Rs.1,781.38 million as of September 30, 2024, March 31, 2024, March 31, 2023 and March 31, 2022, respectively and a net working capital turnover ratio of 4.20, 6.35, 12.87, 10.63 and 17.87 for the six months ended September 30, 2024 and 2023 and Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively. If the company is unable to comply with repayment and other covenants in its financing agreements, the company's business, financial condition, cash flows and credit rating could be adversely affected.
  • Its may not be able to compete successfully in the highly competitive and fast evolving agricultural tractor and construction vehicle markets.
  • The company has had negative cash flows in the past and may continue to have negative cash flows in the future.
  • The company has certain contingent liabilities that have not been provided for in its Restated Consolidated Financial Information, which if materialize, may adversely affect its financial condition.
  • Any defects in its axles, transmissions, gears or after-sales services may adversely impact the company reputation and ability to sell its products, result in claims for damages and even lead to product recalls or similar actions, which could have an adverse impact on its operations.
  • Disruptions of transportation network and transportation infrastructure or deficiencies in service provided by its logistic service providers may have an adverse effect on the company's business and results of operations.
  • The company depends on its supplier base of 220 suppliers in India and 58 suppliers internationally for raw materials, parts and other materials as of September 30, 2024. Any interruption in the availability of raw materials, parts and other materials, or any disruption, breakdown or shutdown of its suppliers or any instability of the company supplier base could adversely impact its operations.
  • Increases in the prices of, or the company failures to obtain raw materials, parts and other materials required for its operations could adversely affect the company business and results of operations.
  • Its future success depends on the company ability to identify market trends, innovate and meet evolving customer demands and preferences profitably. If the company is unable to do so, its sales, business and results of operations would be adversely affected.
  • The company may be unable to adequately protect its intellectual property rights and may be subject to intellectual property infringement claims, either of which may substantially harm its business.
  • Errors in forecasting demand for its axles, transmissions and gears could result in the misallocation of production capacity which, in turn, could lead to decreased efficiency, increased cost and lost opportunities.
  • The company derives 34.60%, 36.09%, 35.87%, 38.19% and 36.80% of its revenue from exports from the six months ended September 30, 2024 and September 30, 2023 and Fiscals 2024, 2023 and 2022, respectively. Its global operations involve challenges and risks that could increase its expenses, adversely affect its results of operations and require increased time and attention from the company management.
  • The company is unable to trace some of its historical records including forms filed with the RoC, and certain of its forms are undated and/ or unstamped and/or have factual discrepancy. Further, the company has delayed in making certain regulatory filings required to be made with the RBI under applicable law. The company cannot assure you that regulatory proceedings or actions will not be initiated against it in the future and that the company will not be subject to any penalty imposed by the competent regulatory authority in this regard.
  • Its sales volumes are subject to fluctuations and are dependent on the end customers' demands. Any loss of customer relationship could have an adverse impact on its reputation, business, results of operations and financial condition.
  • The company may not be successful in implementing its growth strategy, which may have an adverse impact on its reputation, business, prospects, results of operations and financial condition.
  • The company or the Carraro Group may not succeed in continuing to establish, maintain and strengthen the "Carraro" brand and the "Carraro" brand could be harmed by complaints and negative publicity, in India and globally, which could have an adverse impact on its reputation, business, results of operations and financial condition.
  • The company is exposed to risks in connection with the potential failure or non-performance of distributors or authorized dealers that provide after-sales services to its customers.
  • The company requires certain approvals and licenses in the ordinary course of business and are subject to costs, risks and uncertainties, including those associated with laws and regulations in domestic and foreign jurisdictions in which the company operates, and the failures to obtain or retain them in a timely manner may materially adversely affect its operations.
  • The company is subject to substantial government regulations, which are subject to change, and the failures to comply with such regulations may materially adversely affect its operations.
  • Failures or disruption of the company information technology systems may adversely affect its business, financial condition, results of operations, cash flows and prospects.
  • Its business depends on adequate and uninterrupted availability of power, fuel and water, and any disruption to power or water sources could increase its production costs and may have an adverse impact on the company operations.
  • Its business depends substantially on the continued efforts of the company management including its Key Managerial Personnel and the company Senior Management and other qualified personnel, and its operations may be disrupted if the company lose their services.
  • As of September 30, 2024, the company engaged 39 contractors and 635 contractual temporary employees in its production processes, and their failures to complete the project on time or at all may adversely affect its business and profitability.
  • Its may not realize the anticipated benefits of existing or future strategic alliances, acquisitions, divestitures, or business strategies.
  • The company has used information from the Markets and Markets Report which its commissioned for industry related data in this Red Herring Prospectus and any reliance on such information is subject to inherent risks.
  • Changes in tax laws may materially and adversely affect its business, prospects, financial condition, results of operations and cash flows.
  • The company requires significant capital, and may need to seek additional financing to support our growth strategies. Any failures to raise additional financing could have an adverse effect on its business, results of operations, financial condition and cash flows.
  • Foreign exchange rate fluctuations can adversely affect its financial results due to sales and expenses in different currencies and the value of the company Equity Shares.
  • Its business strategy and competitive position are heavily dependent on the success of its R&D activities and failures to achieve successful innovations would have an adverse impact on the company growth, business and financial condition.
  • The company relies primarily on third-party insurance policies to insure its operations- related risks. If the company insurance coverage is inadequate, it may have an adverse effect on its business, financial condition and results of operations.
  • If the company fails to maintain an effective system of internal controls, its may not be able to successfully manage, or accurately report, the company financial risks. Despite its internal control systems, the company may be exposed to operational risks, including internal or external fraud or misconduct by its employees or other third parties, which could adversely affect its reputation and our results of operations.
  • The company is subject to anti-corruption, anti- bribery, anti-money laundering, financial and economic sanctions and similar laws, and non-compliance with such laws can subject it to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could adversely affect its business, prospects, financial condition, results of operations, and cash flows.
  • The company may be subject to unionization, work stoppages or increased labor costs, which could adversely affect its business and results of operations.
  • The company regularly work with hazardous substances and activities in its operation which can be dangerous and could cause injuries to people or property.
  • Its ability to pay dividends in the future will depends on the company earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.
  • Its may be unable to renew the company existing leases or secure new leases for its existing offices.
  • The company track certain operational metrics and non-GAAP measures for our operations. Certain of its operational metrics are subject to inherent challenges in measurement and any real or perceived inaccuracies in such metrics may adversely affect its business and reputation.
  • The company is entitled to certain tax benefits. These tax benefits are available for a definite period of time, which, on expiry or if withdrawn prematurely, may adversely affect its business, financial condition, results of operations, cash flows and prospects.
  • If the company is classified as a passive foreign investment company for U.S. federal income tax purposes, U.S. investors in Equity Shares may be subject to adverse U.S. federal income tax consequences.
  • The requirements of being a listed company may strain its resources which may have a material adverse impact on the company operations.

The Issue type of Carraro India Ltd is Book Building.

The minimum application for shares of Carraro India Ltd is 21.

The total shares issue of Carraro India Ltd is 17755682.

Initial public offering of [*] equity shares bearing face value of Rs. 10 each (the "Equity Shares") of Carraro India Limited (the "Company" or "Issuer") for cash at a price of Rs. [*] per equity share (the "Offer Price") aggregating up to Rs. 1250.00 crores (the "Offer") comprising an offer for sale of [*] equity shares aggregating up to Rs. 1250.00 crorse by Carraro International S.E. (the "Promoter Selling Shareholder", and such offer for sale, the "Offer for Sale", and such equity shares, the "Offered Shares"). The offer would constitute [*]% of the post-offer paid-up equity share capital of the company. Price Band: Rs. 668 to Rs. 704 per equity share of face value of Rs. 10 each. The Floor price is 66.80 times the face value of the equity shares and cap price is 70.40 times the face value of the equity shares. Bid can be made for a minimum of 21 equity shares and in multiples of 21 equity shares.