The Rs 1,269-crore IPO consists only of an offer-for-sale with no fresh issue component. The concrete equipment player has fixed the price band in the range of Rs 599 to Rs 629 per share.
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Anand Rathi Report
Ajax Engineering Ltd. will launch its initial public offering today and the offer closes for subscription on Feb. 12. The concrete equipment player has fixed the price band in the range of Rs 599 to Rs 629 per share.
The Rs 1,269-crore IPO consists only of an offer-for-sale with no fresh issue component.
Valuation & outlook
Ajax Engineering since its inception 32 years ago, it has developed comprehensive range of concrete equipment product portfolio across the concrete application value chain. The company follows an asset-light model by sourcing materials from 546 suppliers.
It result focuses on localisation as a result of which imports constitute less 10% of costs of materials. The company’s addressable market is growing faster given the government thrust on infrastructure, which augurs well for the company.
On the other hand promotor group needs to offload shares over 3 years to reduce the stake to75% or lower (currently 82% post issue). However the company offers niche construction equipment in its business has a robust financials. On valuation parse, based on FY24 it is seeking PE of 32 times and post issue market cap comes at Rs 71,961 million with the issue is reasonably priced. Therefore, given the factors like, market leading in SLCM’s products, present across all the concrete application value chain and stable top and bottom lines, we recommend the issue can be consider as “Subscribe for Long term”.
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