Ajax Engineering Limited, a leading manufacturer of concrete equipment in India, is set to launch its Initial Public Offering (IPO) on February 10, 2025. The company, founded in 1992, has established itself as a prominent player in the concrete equipment industry, with a diverse range of products and a strong market presence. The IPO, which will close on February 12, 2025, aims to raise approximately ₹1,269.35 crore through an offer for sale (OFS) of 2.02 crore equity shares.
The IPO has generated significant interest among investors due to Ajax Engineering’s strong financial performance and market position. With a price band set between ₹599 and ₹629 per share, the company is offering investors an opportunity to participate in its growth story. The IPO is structured as a book-built issue, with shares expected to be listed on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on February 17, 2025.
Article Contents
Ajax Engineering Limited IPO
| Company Name: | Ajax Engineering Limited |
| IPO Date: | February 10-12, 2025 |
| Price Band: | ₹599 – ₹629 per share |
| Lot Size: | 23 shares |
| Issue Size: | ₹1,269.35 crore |
| Listing Date: | February 17, 2025 |
| Listing Exchanges: | BSE, NSE |
Company Background
Ajax Engineering Limited, established in 1992, has grown to become a leading manufacturer of concrete equipment in India. The company specializes in designing, developing, and engineering innovative concrete equipment for various applications in the construction industry.
Key Products:
- Self-loading concrete mixers (SLCMs)
- Concrete batching plants
- Transit mixers
- Concrete pumps
- Other concrete-related equipment
Market Position:
- 77% market share in the SLCM segment (as of September 30, 2024)
- Sold over 29,800 units of concrete equipment in India over the past decade
- 51 dealers across 23 states in India and 25 dealers/distributors outside India
IPO Details
Issue Structure:
- Total Issue Size: 2.02 crore equity shares
- Offer for Sale (OFS): 2.02 crore equity shares
- Face Value: ₹1 per equity share
Price Band and Lot Size:
- Price Band: ₹599 – ₹629 per share
- Lot Size: 23 shares
- Minimum Investment: ₹14,467 for retail investors
Investor Categories:
- Retail Individual Investors (RII): 35% of the net offer
- Non-Institutional Investors (NII): 15% of the net offer
- Qualified Institutional Buyers (QIB): 50% of the net offer
Important Dates:
- IPO Opening Date: February 10, 2025
- IPO Closing Date: February 12, 2025
Financial Performance
Key Financial Metrics:
| Fiscal Year | Revenue (₹ crore) | Profit After Tax (₹ crore) |
|---|---|---|
| FY 2022 | 771.85 | 66.38 |
| FY 2023 | 1,172.57 | 135.53 |
| FY 2024 | 1,780.07 | 225.28 |
Financial Ratios (FY 2024):
- Return on Equity (ROE): 24.53%
- Return on Capital Employed (ROCE): 32.82%
- EBITDA Margin: 15.82%
- PAT Margin: 12.65%
- Debt to Equity Ratio: 0.01
- Earnings Per Share (EPS): ₹19.68 (Basic)
- Net Asset Value (NAV): ₹80.24 per share
Strengths and Opportunities
Strengths:
- Market Leadership: Dominant position in the SLCM segment with a 77% market share
- Diverse Product Portfolio: 141 concrete equipment variants developed as of September 30, 2024
- Strong Distribution Network: 51 dealers across 23 states in India and 25 international dealers/distributors
- Robust Financial Performance: Consistent growth in revenue and profitability
Opportunities:
- Infrastructure Development: Increasing government focus on infrastructure projects in India
- Urbanization: Growing urbanization trend driving demand for concrete equipment
- Export Potential: Expansion opportunities in international markets
Risks and Challenges
- Economic Fluctuations: Vulnerability to economic cycles and slowdowns in the construction sector
- Competition: Potential increase in competition from domestic and international players
- Raw Material Costs: Fluctuations in raw material prices may impact profit margins
- Regulatory Changes: Changes in government policies or regulations affecting the construction industry
IPO Objectives
- Providing an exit opportunity for existing shareholders
- Enhancing the company’s visibility and brand image
- Achieving the benefits of listing on recognized stock exchanges
Subscription Status and Grey Market Premium
- Overall Subscription: 0.28 times
- Qualified Institutional Buyers (QIB): 0.26 times
- Non-Institutional Investors (NII): 0.28 times
- Retail Individual Investors (RII): 0.29 times
Expert Opinions and Brokerage Recommendations
KR Choksey:
- Recommendation: Subscribe
- Rationale: Reasonable valuation compared to industry peers, strong financial performance, and favorable industry outlook
Reliance Securities:
- Recommendation: Positive outlook
- Rationale: Market leadership, growth trajectory, and potential for expansion
BP Equities:
- Recommendation: Favorable review
- Rationale: Strong market position and consistent financial growth
Conclusion
The Ajax Engineering IPO presents an opportunity for investors to participate in the growth story of a leading concrete equipment manufacturer in India. With its strong market position, diverse product portfolio, and robust financial performance, the company is well-positioned to capitalize on the growing infrastructure and construction sector in India.
However, potential investors should carefully consider the risks associated with the industry, including economic fluctuations and competition, before making an investment decision. The IPO’s pricing, which appears reasonable compared to industry peers, and the positive grey market premium suggest a favorable market sentiment towards the issue.
As the IPO progresses, investors should monitor the subscription status across different categories and stay informed about any updates or changes in market conditions. Ultimately, the decision to invest should be based on individual financial goals, risk tolerance, and a thorough analysis of the company’s prospects and the overall market conditions.
