Kross IPO: Breaking Down the Company’s Financial Performance
Sep 6, 2024
Kross Limited, a prominent player in the manufacturing sector, is set to release its Initial Public Offering (IPO). The Kross Limited IPO date is set to be on September 9, 2024. The Kross Ltd IPO would raise ₹500 crores, with fresh issue and offer for sale. Kross Limited share price in the pre-IPO market is an important part of interest, particularly as the company's unlisted share price presently stands at ₹93 per share with a face value of ₹10 per share. This article delves into Kross Limited's financial performance, presenting a complete analysis of its revenue, profit margins, and financial health and additionally covers market presence and reasons why investors have to take into account the Kross IPO.
Company Overview
Established in 1991, Kross Limited specializes in manufacturing trailer axles, suspensions, and high-performance forged and precision machined safety-critical parts for medium and heavy-duty commercial vehicles (M&HCV) and agricultural equipment. The company has built a robust reputation for quality and innovation, making it a significant player in its industry.
The company has also built its name for its expertise in forging and precision machining, catering to top Original Equipment Manufacturers (OEMs) and Tier 1 companies in India.
Commercial Vehicle Components: Kross manufactures an extensive variety of elements for medium and heavy-obligation trucks, including transmission, rear axle assembly, steerage meeting, equipment moving mechanism, and chassis components.
Agricultural Equipment Components: The organisation produces critical components for tractors, which includes hydraulic elevate assemblies, rear axle assemblies, and spindle front axles.
Trailer Axles and Suspensions: Kross is understood for its exquisite trailer axles and suspension systems, designed to decorate tire existence, lessen renovation costs, and provide value for cash.
Market Presence and Clientele
Kross Limited operates a state-of-the-art production facility in Jamshedpur, ready with superior machinery and generation to ensure excessive precision and quality in its merchandise. The company also has a sales workplace in Chennai and warehouses in more than one places, along with Chennai, Madurai, Bangalore, Hoshiarpur, and Pantnagar.
Kross has set up a strong marketplace presence through consistently handing over splendid merchandise to its customers. The organisation's various client base consists of main OEMs and Tier 1 suppliers in the commercial vehicles and agricultural system sectors.
Kross Limited IPO Details
The Kross IPO is a significant event in the financial market, offering a total issue size of ₹500Cr This is divided into a fresh issue of 1.04Cr shares worth ₹250 Cr and an offer for sale of an equal number of shares. Investors can subscribe to the IPO from September 9, 2024, to September 11, 2024.
IPO Subscription Date | September 9 to September 11, 2024 |
IPO Allotment Date | September 12 2024 |
IPO Listing Date | September 16 2024 |
IPO Price Band | ₹228 to ₹240 per share |
Lot Size | 62 Shares |
Total Issue Size | ₹500 crores |
Fresh Issue | ₹250 crores |
Offer for Sale | ₹250 crores |
Listing Platforms | BSE, NSE |
Financial Performance
Kross Limited has presented a sound financial growth in recent years, making the Kross Limited IPO a promising investment. Some key financial highlights include:
Revenue Growth: The revenue extended by 27% from ₹489 crores in FY23 to ₹621 crores in FY24. This increase is attributed to the company's strategic growth for its products inside the M&HCV and agricultural sectors.
Profit Margins: The profit after tax (PAT) rose with the aid of 45%, from ₹30 crores in FY23 to ₹44 crores in FY24. This considerable boom in profitability reflects the organization's efficient cost management and operational excellence.
Debt Reduction: Kross Limited plans to make use of ₹90 crores from the IPO proceeds to repay its debt, which stood at ₹128 crores as of June 2024. This move is expected to bolster the financial stability and decrease interest expenses.
Financials (in ₹Cr) | FY24 | FY23 | FY22 |
Revenue | 621 | 489 | 297 |
Profit after tax (PAT) | 44 | 30 | 12 |
Net Worth | 146 | 102 | 72 |
ROE (%) | 30 | 17 | 8 |
ROCE (%) | 28 | 15 | 10 |
EPS (₹) | 8.3 | 22 | 9.6 |
Market Position and Competitors
Kross Limited competes with numerous mounted players in the industry, consisting of Automotive Axles, GNA Axles, Ramkrishna Forgings, Jamna Auto Industries, and Talbros Automotive Components. Despite the competition, Kross has managed to carve out a sizable market share because of its focus on quality and innovation.
Why Investors should consider the Kross IPO
Investors are drawn to the Kross Ltd IPO for several reasons:
Strong Financial Performance: Kross Limited’s revenue and earnings growth imply a healthy financial position and potential for future gains.
Market Position: The company is well-established in manufacturing high-overall performance safety components for commercial cars and agricultural equipment, catering to a diversified consumer base.
Long-Standing Relationships: The company has set up deep relationships with huge OEMs and Tier 1 providers, in addition to a diverse community of domestic dealers and fabricators for its trailer axle and suspension enterprise.
Prominent Manufacturer Status: Kross Limited is one of the leading manufacturers of trailer axles and suspension assemblies in India, and one of the few companies locally capable of generating these additives in-house.
Integrated Manufacturing Operations: Kross’s in-house product and procedure layout capabilities, combined with its scale and flexibility, allows it to provide complete solutions to its customers.
Significant Market Share: The company has a considerable market share in the M&HCV and agricultural equipment sectors, competing with huge players like Automotive Axles, GNA Axles, Ramkrishna Forgings, Jamna Auto Industries, and Talbros Automotive Components.
Experienced Promoters and Management: Kross Ltd benefits from experienced promoters and a capable management team with a proven track record that drives the growth and operational excellence.
Strategic use of IPO Proceeds: The planned debt reduction and investment in new equipment and working capital are anticipated to enhance the business enterprise’s operational efficiency.
Risks and Concerns
While the Kross IPO gives a promising investment opportunity, potential investors ought to keep in mind the following risks and challenges:
Market Competition: The company faces stiff competition from different mounted players within the industry, which can impact its market share and profitability and is expected to put stress at the margins.
Economic Factors: The business vehicle and agricultural system sectors are subject to economic cycles that can affect the overall performance. Fluctuations within the economy, along with changes in interest rates can also be the challenges.
Operational Risks: Any disruptions in the supply chain, production problems, or first-rate manipulation problems ought to negatively affect the corporation’s operations and reputation.
Conclusion
The Kross Ltd IPO gives a compelling investment opportunity, sponsored by way of the business enterprise’s sturdy economic overall performance and strategic growth plans. However, investors have to conduct thorough due diligence and focus on the associated risks before making any investments. With its sturdy revenue increase, progressed profit margins, and prudent use of IPO proceeds, Kross Limited is well-placed for future success.