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Indo Farm Equipment Ltd IPO
Status: Closed
Overview
IPO date
31 Dec 2024 to 02 Jan 2025
Face value
₹ 10 per share
Price
₹ 204 to ₹215 per share
Issue Size
12,100,000 shares
(aggregating up to ₹ 260.15 Cr)
(aggregating up to ₹ 260.15 Cr)
Allotment Date
03 Jan 2025
Listing at
NSE
Issue type
Book Building
Sector
Automobile
Objectives of Indo Farm Equipment Ltd IPO
Initial public offer of up to 12,100,000 equity shares of face value of Rs. 10 each ("Equity Shares") of Indo Farm Equipment Limited (The "Company" or The "Issuer") for cash at a price of Rs. 215 per equity share, aggregating to Rs. 260.15 croress ("The Offer") comprising of a fresh issue of up to 8,600,000 equity shares aggregating to Rs. 184.90 croress (The "Fresh Issue") and an offer for sale of up to 3,500,000 equity shares by Ranbir Singh Khadwalia ("The Promoter Selling Shareholder") aggregating to Rs. 75.25 crores ("offer for sale"). The offer will constitute 25.18% of the fully diluted post offer paid-up equity share capital of the company.
Further, the company, in consultation with the brlm, has undertaken pre-ipo placement of 1,900,000 equity shares of Rs. 10/- each at the rate of Rs. 185/- per share aggregating to Rs. 35.15 crores accordingly, the size of the fresh issue has been reduced from 10,500,000 equity shares to 8,600,000 equity shares of face value of Rs. 10 each. The relevant investors that have subscribed to the equity shares pursuant to the pre-ipo placements have, prior to the allotment of equity shares, been informed that there is no guarantee that the offer may come through or the listing may happen and accordingly, the investment was done by the relevant investors solely at their own risk.
Indo Farm Equipment Ltd IPO Strategy
- Augment capital base for scaling and expanding our operations.
- Reduce Debt Levels and improve Debt to Equity Ratio.
- Focus on the niche market of Pick and Carry Cranes.
- Augment our Dealer Network and Sales Force.
About Indo Farm Equipment Ltd
Indo Farm Equipment Limited, was originally incorporated as 'Welcut Tools Private Limited' on October 05, 1994 as a Private Limited Company with the Registrar of Companies, Punjab, H.P. & Chandigarh. Subsequently, name of the Company was changed to Welcut Industries Private Limited vide Certificate dated February 21, 1995. Further, the Company converted into a Public Company and the name was changed to Indo Farm Equipment Limited dated July 05, 1999; again to Indo Farm Tractors & Motors Limited on October 30, 2003 and thereafter, was again changed to Indo Farm Industries Limited dated December 18, 2007. Consequently, name of the Company was changed to Indo Farm Equipment Limited on November 04, 2009 vide fresh Certificate of Incorporation by Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh.
The Company is a fully integrated manufacturer of world class Tractors, Pick & Carry Cranes and other farm equipments such as harvester combines, rotavators and other related spares and components. The Company has manufacturing facilities in Baddi, Himachal Pradesh which includes a captive foundry unit and dedicated machine shop, fabrication and assembling units for Tractors, pick & Carry Cranes and other equipments. Their facilities are equipped with induction furnaces, pneumatic molding machines, automatic molding line, sand plant, fully equipped Metallurgy and Sand Testing Laboratory, Machining Center, Gear Shop, Press Shop, Fabrication Shop, Paint Shop, Assembly unit, Quality Room & Utility room.
The Company acquired Engine technology and started manufacturing operations of Tractor and components in year 2000. In 2001, it launched Indo farms first tractor model 2050 DI; launched 3-series tractor range 3065DI, 3050DI, 3040DI and 3035DI in 2005; in 2006, it started production of in-house captive foundry division and in 2007, it introduced Pick & Carry Cranes. In 2009, it commenced production of Indo Power Green Gensets; started production of harvester combines and also launched 75HP and 90 HP tractors in 2010.
In 2011, the Company initiated production of new generation crane model 16FN; launched Indo Power Pick and Carry cranes with the capacity of 18 tons and 23 tons in 2014; started production of 26 HP 4x4 orchard tractors in 2015. Later on, the Company incorporated its subsidiary, Barota Finance Limited NBFC for providing retail financing for their tractor in 2017. It launched Indo power 30 FN crane in 2019; launched Indo farm 20HP and 100HP tractor in 2020; launched 1026e tractor model in 2021; launched Indo 3055 DI HT and 3060.DI HT tractor in 2022 and launched Indo farm 3055 NV PLUS, 3065DI, 3075DI IN BS-IV and Indo Power pick and carry cranes of FN series in 2023.
The Company is proposing a Public Offer aggregating 14,000,000 comprising 10,500,000 Equity Shares through Fresh Issue and 3,500,000 Equity Shares through Offer for Sale.
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Strengths vs Risks of Indo Farm Equipment Ltd
Know the pros & cons
Strengths
Fully Integrated and established Manufacturing Setup.- Well educated and experienced management.
- In-house NBFC Setup.
- Manufacturing Wide Range of Products.
Risks
- The company derives a significant portion of its revenue from the sale of tractors (approximately 52.16%) & Pick & Carry cranes (Approximately 47.77%) during the Fiscal 2024 and any reduction in demand or in the manufacturing of such products could have an adverse effect on its business, results of operations and financial condition.
- If the company is not able to obtain, renew or maintain its statutory and regulatory licenses, registrations and approvals required to operates its business, it may have a material adverse effect on the company's business, results of operations and financial condition.
- The company proposed expansion plans w.r.t its new manufacturing facilities being set up are subject to the risk of unanticipated delays in implementation and cost overruns.
- Average Capacity utilization for FY 2022 to FY 2024 is 32% for tractors and 87% for cranes. Under-utilization of our manufacturing capacities and an inability to effectively utilize its expanded manufacturing capacities could have an adverse effect on its business, future prospects and future financial performance.
- The company has not yet placed orders in relation to the capital expenditure to be incurred for the proposed expansion project. In the event of any delay in placing the orders, or in the event the vendors are not able to provide the machines and equipments in a timely manner, or at all, may result in time and cost over-runs and its business, prospects and results of operations may be adversely affected.
- The capacity expansion for the manufacturing of Pick & Carry cranes is based on the expected domestic demand in India, with no confirmed order book for the additional production, and the company sales are concentrated primarily in India, making it vulnerable to market fluctuations, regulatory changes, and economic downturns.
- The company has recorded low growth in Revenue and PAT margins in the last three Fiscals of the Company and its Subsidiary. The company PAT Margin for the quarter ended June 30, 2024, for Fiscal 2024, Fiscal 2023 and Fiscal 2022 were 3.27%, 4.16%, 4.15% and 3.90% respectively.
- Its ability to sell tractors is heavily dependent on financing support from Banks, NBFCs, and the company subsidiary NBFC, which exposes it to risks related to financing availability, regulatory compliance, and operational performance of its subsidiary NBFC.
- The Company, its Promoters, its Directors, and its Subsidiary are parties to certain legal proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, results of operations and financial condition.
- The geographical concentration of its manufacturing facilities in Himachal Pradesh may restrict the company operations and adversely affect its business and financial conditions.
- The Company has received complaints after filing of the Draft Red Herring Prospectus and receiving observations from SEBI, alleging misreporting in its financial statements and non compliance with applicable law in relation to leasehold land and other aspects. These complaints by third parties may adversely affect its reputation and business.
- Its top ten customers/ dealers contribute to 39.10%, 23.13%, 19.73% and 23.63% for the period ended June 30, 2024 and financial years ended March 31, 2024, March 31, 2023 and March 31, 2022 of its revenue from operations. If the company existing dealers does not deal with it, or the company relationships are impaired or terminated, its revenue could decline, and its results of operations would be adversely impacted.
- The value of its Primary security (the company obtain only primary security in form of hypothecation of tractor and no collateral is available except personal guarantee) may decrease or its may experience delays in enforcing Primary security when borrowers default on their obligations, which may result in failures to recover the expected value of collateral security exposing it to potential loss.
- Non-compliance with RBI norms and direction or other regulatory requirements could lead to adverse actions from such regulatory bodies, which may have a material adverse effect on its business, financial condition, results of operation or cash flows.
- Any failures on its part to effectively manage the company inventories along with fluctuations in operational scale and inventory levels, may result in an adverse effect on its operating results and financial condition.
- Operational Inefficiencies, Inventory management risks, and raw material price volatility may adversely impact financial performance and sustainability.
- Its revenue from manufacturing operations is significantly concentrated in the top 5 states, which contributed to 68.27%, 56.92%, 63.07% and 62.81% to its total revenue for the Fiscal Year 2021-22, 2022-23, 2023-24 and period ended June 30, 2024 respectively. Any adverse political or economical stability in such States may have a material adverse effect on its business, results of operations and financial condition.
- The company relies on its top 10 suppliers for raw materials and work-in-progress goods, but operate without long-term or binding agreements with any suppliers. Any shortages, delays, or disruptions in supply may have a material adverse effect on its business, financial condition, results of operations, and cash flows.
- External Factors shall impact its tractor demand and business operations such as government policies, agriculture sector, changes in diesel prices, bank credit extended towards tractors, seasonality of demands etc.
- The Objects of the Offer for which funds are being raised have not been appraised by any bank or financial institution. The fund requirements, the deployment of funds and the intended use of the Net Proceeds as per the details mentioned in the section titled "Objects of the Issue" are based on its current business plan, management estimates, current and valid quotations and other commercial and technical factors. Any revision in the estimates may require us to reschedule its expenditure and may have a bearing on the company expected revenues and earnings.
- During Fiscal 2022 to Fiscal 2024, the company derives more than 99% of its revenue of tractor division from dealers. Pricing pressure may adversely affect its gross margin, profitability and ability to increase the company prices, which in turn may materially adversely affect its business, results of operations and financial condition.
- The Improper handling, manufacturing or storage of raw materials or products, damage to such raw materials and products, could subject it to regulatory and legal action, damage the company reputation and have an adverse effect on its business, results of operations and financial condition.
- Some of its business operations are being conducted on leased / rented premises. The company inability to seek renewal or extension of such leases may materially affect its business operations.
- Adverse changes in its credit ratings could materially adversely affect the company ability to raise funds and hence affect its financial conditions.
- Any failures of the company information technology systems could adversely affect its business and the company operations.
- Information relating to the installed capacity, actual production and capacity utilization of its manufacturing facilities included in this Red Herring Prospectus are based on various assumptions and estimates and future production and capacity may vary.
- The company is dependent on a number of key personnel, including its senior management, and the loss of, or the company inability to attract or retain such persons could adversely affect its business, results of operations and financial condition.
- The company relies on third-party transportation providers for both procurements of its raw materials and distribution of the company products. Any failures by any of its transportation providers to deliver the company raw materials or its products on time, or in good condition, or at all, may adversely affect the company business, financial condition and results of operations.
- There are certain instances of delay in payment of provident fund by the Company. Any further delay in payment of provident fund may attract financial penalties from the authority and in turn may have a material adverse impact on its financial condition and cash flows.
- The Company is involved in an outstanding legal proceeding pending before the Honble National Company Law Tribunal Chandigarh Bench. An adverse outcome of the proceeding could have an adverse impact on the Company's business, results of operations and financial condition.
- The Offer Price, market capitalization to revenue multiple based on the Offer Price of the Company, may not be indicative of the market price of the Company on listing or thereafter.
- As on June 30, 2024, the company has certain contingent liabilities aggregating to Rs. 200.34 million that have not been provided for in the Company's financials, which if realized, could adversely affect its financial condition.
- Its Promoters and Promoter Group will, even after the completion of the Issue, continue to be the company largest Shareholders and can influence the outcome of resolutions, which may potentially involve conflict of interest with the other Shareholders.
- The company has reported negative net cash flows in the past and may do so in the future.
- Any inability on its part to collect amounts owed to it could result in the reduction of the company profits.
- Its business is both manpower and machine intensive. The company business may be adversely affected by Strikes, work stoppages, increased wage demands by its employees, or any other kind of disputes with the company employees, and if its unable to engage new employees at commercially attractive terms.
- Its inability to fulfill the export obligation under the EPCG scheme could subject it to payment of customs duties together with interest thereby adversely impacting its financial condition.
- Its insurance coverage may not be sufficient or may not adequately protect it against all material hazards, which may adversely affect its business, results of operations and financial condition.
- A slowdown or shutdown in its manufacturing operations of the company manufacturing facilities could have an adverse effect on its business, results of operations and financial condition.
- Some of its borrowings carry restrictive covenants or conditions and could affect the company ability to manage its business operations.
- The company has in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.
- The Company has issued Equity Shares during the last twelve months at a price which may be lower than the Offer Price.
- The company faces competition from established competitors in the market having their own strong Non-Banking Financial Company (NBFC) network.
- Its Promoter and members of Promoter Group have mortgaged their personal properties and provided personal guarantees for its borrowings to secure the company loans. Its business, financial condition, results of operations, cash flows and prospects may be adversely affected by the revocation of all or any of the personal guarantees provided by its Promoter and members of Promoter Group in connection with the Company's borrowings.
- Failures to meet the quality standards required by the market and by auto industry regulators could materially adversely affect its results of operations and financial conditions.
- Its business is subject to seasonality. Lower revenues in the harvest time of any Fiscal may adversely affect its business, financial condition, results of operations and prospects.
- The company failures to identify and understand evolving industry trends and preferences and to develop new products to meet its end customers' demands, which may materially adversely affect the company business.
- Activities involving our manufacturing process can be dangerous and can cause injury to people in certain circumstances and could expose it to the risk of liabilities, loss of revenue and increased expenses.
- Any failures to protect or enforce its rights to own or use trademarks and brand names and identities could have an adverse effect on its business and competitive position.
- Product liability and other civil claims and costs incurred because of product recalls could harm its business, results of operations and financial condition.
- Pursuant to listing of the Equity Shares, its may be subject to pre-emptive surveillance measures like Additional Surveillance Measure ("ASM") and Graded Surveillance Measures ("GSM") by the Stock Exchanges in order to enhance market integrity and safeguard the interest of investors.
- A significant change in the regulatory environment, government schemes or duty exemptions could disrupt its business and may affect the company cash flow and financial condition and the price of its Equity Shares.
- In addition to normal remuneration, other benefits and reimbursement of expenses of some of its directors (including the company Promoter) and Key Management Personnel are interested in the Company to the extent of their shareholding and dividend entitlement in the Company.
- Its future success will depends on the company ability to effectively implement its business and growth strategies failing which the company results of operations may be adversely affected.
- Competition in the industries in which the company operates could result in a reduction in its market share or requires it to incur substantial expenditures on advertising and marketing, either of which could adversely affect its business, results of operations and financial conditions.
- Conflicts of Interests may arise with its Promoter Group Entities in the future.
- If the company pursue strategic acquisitions or joint ventures, its may not be able to successfully consummate favourable transactions or successfully integrate acquired businesses.
- The company faces foreign exchange risks that could adversely affect its results of operations and cash flows.
- The Company will not receive any proceeds from the Offer for sale by the Selling Shareholders.
- Its may be subject to fraud, theft, employee negligence or similar incidents.
- Any material deviation in the utilization of the Net Proceeds as disclosed in this Red Herring Prospectus shall be subject to certain compliance requirements, including prior approval of the shareholders of the Company.
- The Company has not paid dividends in the last 3 Fiscals. There can be no assurance that the Company will be in a position to pay dividends in the future.
- The company relies on contract labor to some extent for carrying out certain of its operations and its may be held responsible for paying the wages of such workers, if the independent contractors through whom such workers are hired default on their obligations, and such obligations could have an adverse effect on its results of operations and financial condition.
- Certain Industry information included in this Red Herring Prospectus has been derived from the Company commissioned B2K Analytics Industry Report and the Company had paid for such Industry Report.
Indo Farm Equipment Ltd Peer Comparison
Understand the company’s industry standing
Indo Farm Equipment Ltd
Escorts Kubota Ltd
Action Construction Equipment Ltd
Face Value
10
10
2
Standalone / Consolidated
Standalone
Consolidated
Consolidated
Total Income Rs. Cr.
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---
---
EPS-Basis
4.15
92.64
27.56
EPS-Diluted
---
---
---
NAV Per Share
84.43
830.43
103.28
P/E-Basic EPS
---
36.79
47.42
P/E-Diluted EPS
---
---
---
RONW(%)
4.92
11.44
30.78
Latest NAV Period
---
---
---
Latest NAV
---
---
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The IPO opens on 31 Dec 2024 & closes on 02 Jan 2025.
Indo Farm Equipment Limited, was originally incorporated as 'Welcut Tools Private Limited' on October 05, 1994 as a Private Limited Company with the Registrar of Companies, Punjab, H.P. & Chandigarh. Subsequently, name of the Company was changed to Welcut Industries Private Limited vide Certificate dated February 21, 1995. Further, the Company converted into a Public Company and the name was changed to Indo Farm Equipment Limited dated July 05, 1999; again to Indo Farm Tractors & Motors Limited on October 30, 2003 and thereafter, was again changed to Indo Farm Industries Limited dated December 18, 2007. Consequently, name of the Company was changed to Indo Farm Equipment Limited on November 04, 2009 vide fresh Certificate of Incorporation by Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh.
The Company is a fully integrated manufacturer of world class Tractors, Pick & Carry Cranes and other farm equipments such as harvester combines, rotavators and other related spares and components. The Company has manufacturing facilities in Baddi, Himachal Pradesh which includes a captive foundry unit and dedicated machine shop, fabrication and assembling units for Tractors, pick & Carry Cranes and other equipments. Their facilities are equipped with induction furnaces, pneumatic molding machines, automatic molding line, sand plant, fully equipped Metallurgy and Sand Testing Laboratory, Machining Center, Gear Shop, Press Shop, Fabrication Shop, Paint Shop, Assembly unit, Quality Room & Utility room.
The Company acquired Engine technology and started manufacturing operations of Tractor and components in year 2000. In 2001, it launched Indo farms first tractor model 2050 DI; launched 3-series tractor range 3065DI, 3050DI, 3040DI and 3035DI in 2005; in 2006, it started production of in-house captive foundry division and in 2007, it introduced Pick & Carry Cranes. In 2009, it commenced production of Indo Power Green Gensets; started production of harvester combines and also launched 75HP and 90 HP tractors in 2010.
In 2011, the Company initiated production of new generation crane model 16FN; launched Indo Power Pick and Carry cranes with the capacity of 18 tons and 23 tons in 2014; started production of 26 HP 4x4 orchard tractors in 2015. Later on, the Company incorporated its subsidiary, Barota Finance Limited NBFC for providing retail financing for their tractor in 2017. It launched Indo power 30 FN crane in 2019; launched Indo farm 20HP and 100HP tractor in 2020; launched 1026e tractor model in 2021; launched Indo 3055 DI HT and 3060.DI HT tractor in 2022 and launched Indo farm 3055 NV PLUS, 3065DI, 3075DI IN BS-IV and Indo Power pick and carry cranes of FN series in 2023.
The Company is proposing a Public Offer aggregating 14,000,000 comprising 10,500,000 Equity Shares through Fresh Issue and 3,500,000 Equity Shares through Offer for Sale.
Indo Farm Equipment Ltd IPO will close on 02 Jan 2025.
- Fully Integrated and established Manufacturing Setup.
- Well educated and experienced management.
- In-house NBFC Setup.
- Manufacturing Wide Range of Products.
| S.No | Promoters Name | Pre Issue Shares | Pre Issue Percentage | Post Issue Shares | Post Issue Percentage |
|---|---|---|---|---|---|
| 1 | Ranbir Singh Khadwalia | 20326400 | 51.52 | 16826400 | 35.02 |
| 2 | Sunita Saini | 10650348 | 27 | 10650348 | 22.16 |
| 3 | Futuristic Mining & Constructi | 4371960 | 11.08 | 4371960 | 9.1 |
| 4 | Anshul Khandwalia | 997332 | 2.53 | 997332 | 2.08 |
| 5 | Kyoor Healthcare Ltd | 367200 | 0.93 | 367200 | 0.76 |
| 6 | Shubham Khandwalia | 154400 | 0.39 | 154400 | 0.32 |
- The company derives a significant portion of its revenue from the sale of tractors (approximately 52.16%) & Pick & Carry cranes (Approximately 47.77%) during the Fiscal 2024 and any reduction in demand or in the manufacturing of such products could have an adverse effect on its business, results of operations and financial condition.
- If the company is not able to obtain, renew or maintain its statutory and regulatory licenses, registrations and approvals required to operates its business, it may have a material adverse effect on the company's business, results of operations and financial condition.
- The company proposed expansion plans w.r.t its new manufacturing facilities being set up are subject to the risk of unanticipated delays in implementation and cost overruns.
- Average Capacity utilization for FY 2022 to FY 2024 is 32% for tractors and 87% for cranes. Under-utilization of our manufacturing capacities and an inability to effectively utilize its expanded manufacturing capacities could have an adverse effect on its business, future prospects and future financial performance.
- The company has not yet placed orders in relation to the capital expenditure to be incurred for the proposed expansion project. In the event of any delay in placing the orders, or in the event the vendors are not able to provide the machines and equipments in a timely manner, or at all, may result in time and cost over-runs and its business, prospects and results of operations may be adversely affected.
- The capacity expansion for the manufacturing of Pick & Carry cranes is based on the expected domestic demand in India, with no confirmed order book for the additional production, and the company sales are concentrated primarily in India, making it vulnerable to market fluctuations, regulatory changes, and economic downturns.
- The company has recorded low growth in Revenue and PAT margins in the last three Fiscals of the Company and its Subsidiary. The company PAT Margin for the quarter ended June 30, 2024, for Fiscal 2024, Fiscal 2023 and Fiscal 2022 were 3.27%, 4.16%, 4.15% and 3.90% respectively.
- Its ability to sell tractors is heavily dependent on financing support from Banks, NBFCs, and the company subsidiary NBFC, which exposes it to risks related to financing availability, regulatory compliance, and operational performance of its subsidiary NBFC.
- The Company, its Promoters, its Directors, and its Subsidiary are parties to certain legal proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, results of operations and financial condition.
- The geographical concentration of its manufacturing facilities in Himachal Pradesh may restrict the company operations and adversely affect its business and financial conditions.
- The Company has received complaints after filing of the Draft Red Herring Prospectus and receiving observations from SEBI, alleging misreporting in its financial statements and non compliance with applicable law in relation to leasehold land and other aspects. These complaints by third parties may adversely affect its reputation and business.
- Its top ten customers/ dealers contribute to 39.10%, 23.13%, 19.73% and 23.63% for the period ended June 30, 2024 and financial years ended March 31, 2024, March 31, 2023 and March 31, 2022 of its revenue from operations. If the company existing dealers does not deal with it, or the company relationships are impaired or terminated, its revenue could decline, and its results of operations would be adversely impacted.
- The value of its Primary security (the company obtain only primary security in form of hypothecation of tractor and no collateral is available except personal guarantee) may decrease or its may experience delays in enforcing Primary security when borrowers default on their obligations, which may result in failures to recover the expected value of collateral security exposing it to potential loss.
- Non-compliance with RBI norms and direction or other regulatory requirements could lead to adverse actions from such regulatory bodies, which may have a material adverse effect on its business, financial condition, results of operation or cash flows.
- Any failures on its part to effectively manage the company inventories along with fluctuations in operational scale and inventory levels, may result in an adverse effect on its operating results and financial condition.
- Operational Inefficiencies, Inventory management risks, and raw material price volatility may adversely impact financial performance and sustainability.
- Its revenue from manufacturing operations is significantly concentrated in the top 5 states, which contributed to 68.27%, 56.92%, 63.07% and 62.81% to its total revenue for the Fiscal Year 2021-22, 2022-23, 2023-24 and period ended June 30, 2024 respectively. Any adverse political or economical stability in such States may have a material adverse effect on its business, results of operations and financial condition.
- The company relies on its top 10 suppliers for raw materials and work-in-progress goods, but operate without long-term or binding agreements with any suppliers. Any shortages, delays, or disruptions in supply may have a material adverse effect on its business, financial condition, results of operations, and cash flows.
- External Factors shall impact its tractor demand and business operations such as government policies, agriculture sector, changes in diesel prices, bank credit extended towards tractors, seasonality of demands etc.
- The Objects of the Offer for which funds are being raised have not been appraised by any bank or financial institution. The fund requirements, the deployment of funds and the intended use of the Net Proceeds as per the details mentioned in the section titled "Objects of the Issue" are based on its current business plan, management estimates, current and valid quotations and other commercial and technical factors. Any revision in the estimates may require us to reschedule its expenditure and may have a bearing on the company expected revenues and earnings.
- During Fiscal 2022 to Fiscal 2024, the company derives more than 99% of its revenue of tractor division from dealers. Pricing pressure may adversely affect its gross margin, profitability and ability to increase the company prices, which in turn may materially adversely affect its business, results of operations and financial condition.
- The Improper handling, manufacturing or storage of raw materials or products, damage to such raw materials and products, could subject it to regulatory and legal action, damage the company reputation and have an adverse effect on its business, results of operations and financial condition.
- Some of its business operations are being conducted on leased / rented premises. The company inability to seek renewal or extension of such leases may materially affect its business operations.
- Adverse changes in its credit ratings could materially adversely affect the company ability to raise funds and hence affect its financial conditions.
- Any failures of the company information technology systems could adversely affect its business and the company operations.
- Information relating to the installed capacity, actual production and capacity utilization of its manufacturing facilities included in this Red Herring Prospectus are based on various assumptions and estimates and future production and capacity may vary.
- The company is dependent on a number of key personnel, including its senior management, and the loss of, or the company inability to attract or retain such persons could adversely affect its business, results of operations and financial condition.
- The company relies on third-party transportation providers for both procurements of its raw materials and distribution of the company products. Any failures by any of its transportation providers to deliver the company raw materials or its products on time, or in good condition, or at all, may adversely affect the company business, financial condition and results of operations.
- There are certain instances of delay in payment of provident fund by the Company. Any further delay in payment of provident fund may attract financial penalties from the authority and in turn may have a material adverse impact on its financial condition and cash flows.
- The Company is involved in an outstanding legal proceeding pending before the Honble National Company Law Tribunal Chandigarh Bench. An adverse outcome of the proceeding could have an adverse impact on the Company's business, results of operations and financial condition.
- The Offer Price, market capitalization to revenue multiple based on the Offer Price of the Company, may not be indicative of the market price of the Company on listing or thereafter.
- As on June 30, 2024, the company has certain contingent liabilities aggregating to Rs. 200.34 million that have not been provided for in the Company's financials, which if realized, could adversely affect its financial condition.
- Its Promoters and Promoter Group will, even after the completion of the Issue, continue to be the company largest Shareholders and can influence the outcome of resolutions, which may potentially involve conflict of interest with the other Shareholders.
- The company has reported negative net cash flows in the past and may do so in the future.
- Any inability on its part to collect amounts owed to it could result in the reduction of the company profits.
- Its business is both manpower and machine intensive. The company business may be adversely affected by Strikes, work stoppages, increased wage demands by its employees, or any other kind of disputes with the company employees, and if its unable to engage new employees at commercially attractive terms.
- Its inability to fulfill the export obligation under the EPCG scheme could subject it to payment of customs duties together with interest thereby adversely impacting its financial condition.
- Its insurance coverage may not be sufficient or may not adequately protect it against all material hazards, which may adversely affect its business, results of operations and financial condition.
- A slowdown or shutdown in its manufacturing operations of the company manufacturing facilities could have an adverse effect on its business, results of operations and financial condition.
- Some of its borrowings carry restrictive covenants or conditions and could affect the company ability to manage its business operations.
- The company has in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.
- The Company has issued Equity Shares during the last twelve months at a price which may be lower than the Offer Price.
- The company faces competition from established competitors in the market having their own strong Non-Banking Financial Company (NBFC) network.
- Its Promoter and members of Promoter Group have mortgaged their personal properties and provided personal guarantees for its borrowings to secure the company loans. Its business, financial condition, results of operations, cash flows and prospects may be adversely affected by the revocation of all or any of the personal guarantees provided by its Promoter and members of Promoter Group in connection with the Company's borrowings.
- Failures to meet the quality standards required by the market and by auto industry regulators could materially adversely affect its results of operations and financial conditions.
- Its business is subject to seasonality. Lower revenues in the harvest time of any Fiscal may adversely affect its business, financial condition, results of operations and prospects.
- The company failures to identify and understand evolving industry trends and preferences and to develop new products to meet its end customers' demands, which may materially adversely affect the company business.
- Activities involving our manufacturing process can be dangerous and can cause injury to people in certain circumstances and could expose it to the risk of liabilities, loss of revenue and increased expenses.
- Any failures to protect or enforce its rights to own or use trademarks and brand names and identities could have an adverse effect on its business and competitive position.
- Product liability and other civil claims and costs incurred because of product recalls could harm its business, results of operations and financial condition.
- Pursuant to listing of the Equity Shares, its may be subject to pre-emptive surveillance measures like Additional Surveillance Measure ("ASM") and Graded Surveillance Measures ("GSM") by the Stock Exchanges in order to enhance market integrity and safeguard the interest of investors.
- A significant change in the regulatory environment, government schemes or duty exemptions could disrupt its business and may affect the company cash flow and financial condition and the price of its Equity Shares.
- In addition to normal remuneration, other benefits and reimbursement of expenses of some of its directors (including the company Promoter) and Key Management Personnel are interested in the Company to the extent of their shareholding and dividend entitlement in the Company.
- Its future success will depends on the company ability to effectively implement its business and growth strategies failing which the company results of operations may be adversely affected.
- Competition in the industries in which the company operates could result in a reduction in its market share or requires it to incur substantial expenditures on advertising and marketing, either of which could adversely affect its business, results of operations and financial conditions.
- Conflicts of Interests may arise with its Promoter Group Entities in the future.
- If the company pursue strategic acquisitions or joint ventures, its may not be able to successfully consummate favourable transactions or successfully integrate acquired businesses.
- The company faces foreign exchange risks that could adversely affect its results of operations and cash flows.
- The Company will not receive any proceeds from the Offer for sale by the Selling Shareholders.
- Its may be subject to fraud, theft, employee negligence or similar incidents.
- Any material deviation in the utilization of the Net Proceeds as disclosed in this Red Herring Prospectus shall be subject to certain compliance requirements, including prior approval of the shareholders of the Company.
- The Company has not paid dividends in the last 3 Fiscals. There can be no assurance that the Company will be in a position to pay dividends in the future.
- The company relies on contract labor to some extent for carrying out certain of its operations and its may be held responsible for paying the wages of such workers, if the independent contractors through whom such workers are hired default on their obligations, and such obligations could have an adverse effect on its results of operations and financial condition.
- Certain Industry information included in this Red Herring Prospectus has been derived from the Company commissioned B2K Analytics Industry Report and the Company had paid for such Industry Report.
The Issue type of Indo Farm Equipment Ltd is Book Building.
The minimum application for shares of Indo Farm Equipment Ltd is 69.
The total shares issue of Indo Farm Equipment Ltd is 12100000.
Initial public offer of up to 12,100,000 equity shares of face value of Rs. 10 each ("Equity Shares") of Indo Farm Equipment Limited (The "Company" or The "Issuer") for cash at a price of Rs. 215 per equity share, aggregating to Rs. 260.15 croress ("The Offer") comprising of a fresh issue of up to 8,600,000 equity shares aggregating to Rs. 184.90 croress (The "Fresh Issue") and an offer for sale of up to 3,500,000 equity shares by Ranbir Singh Khadwalia ("The Promoter Selling Shareholder") aggregating to Rs. 75.25 crores ("offer for sale"). The offer will constitute 25.18% of the fully diluted post offer paid-up equity share capital of the company.
Further, the company, in consultation with the brlm, has undertaken pre-ipo placement of 1,900,000 equity shares of Rs. 10/- each at the rate of Rs. 185/- per share aggregating to Rs. 35.15 crores accordingly, the size of the fresh issue has been reduced from 10,500,000 equity shares to 8,600,000 equity shares of face value of Rs. 10 each. The relevant investors that have subscribed to the equity shares pursuant to the pre-ipo placements have, prior to the allotment of equity shares, been informed that there is no guarantee that the offer may come through or the listing may happen and accordingly, the investment was done by the relevant investors solely at their own risk.