₹1,269 Crore Ajax Engineering IPO: Issue Details, GMP, Financials, and SWOT Breakdown

The Indian construction industry is booming, and the demand for advanced concrete equipment is rising. Ajax Engineering Limited, one of India’s leading concrete equipment manufacturers, is now set to launch its ₹1,269 crore Initial Public Offering (IPO). Backed by Kedaara Capital, the IPO will open for public subscription from February 10 to 12, 2025, offering investors an opportunity to be part of a well-established player in the sector. However, since this IPO is a pure Offer for Sale (OFS), the company will not receive any proceeds, as existing investors and promoters will sell their stakes.

Before making an investment decision, it’s crucial to analyze the IPO details, Grey Market Premium (GMP), financial performance, and the company’s strengths, weaknesses, opportunities, and threats (SWOT analysis). Let’s break it down to help you understand whether this IPO is worth considering.

IPO Details

Offer Price	₹599 to ₹629 per share
Face Value	₹1 per share
Opening Date	10 February 2025
Closing Date	12 February 2025
Total Issue Size (in Shares)	2,01,80,446
Total Issue Size (in ₹)	₹1,269.35 Cr
Issue Type	Book Built Issue IPO
Lot Size	23 Shares
Listing at	BSE, NSE

The minimum lot size for investors is 23 shares, requiring an investment of ₹14,467. Retail investors can apply for a maximum of 13 lots (299 shares), which amounts to ₹1,88,071. Small High Net Worth Individuals (sHNII) need to bid for at least 14 lots (322 shares), totaling ₹2,02,538, while Big High Net Worth Individuals (bHNII) must apply for at least 70 lots (1,610 shares), amounting to ₹10,12,690. The IPO will also see anchor investors bidding on February 7, 2025. The allotment for this IPO is expected to be finalized on February 13, 2025.

Allocation of Shares

Investors can bid for a minimum of 23 shares and in multiples thereof. Here’s a breakdown of the investment requirements:

Investor Category	Lots	Shares	Investment Amount
Retail (Min)	1	23	₹14,467
Retail (Max)	13	299	₹1,88,071
S-HNI (Min)	14	322	₹2,02,538
S-HNI (Max)	69	1,587	₹9,98,223
B-HNI (Min)	70	1,610	₹10,12,690

Objectives of the IPO

Since this is an Offer for Sale (OFS), the company will not receive any proceeds from the IPO. Instead, the funds raised will go to Kedaara Capital and other selling shareholders. After deducting IPO-related expenses and applicable taxes, each selling shareholder will receive their respective portion of the proceeds.

Grey Market Premium (GMP):

As of February 7, 2025, the Grey Market Premium (GMP) for Ajax Engineering’s IPO stands at ₹57. With the upper price band at ₹629 per share, the estimated listing price is ₹686, indicating a potential gain of 9.06% per share. The GMP indicates market demand, but it’s essential to conduct a thorough analysis before making investment decisions.

Company Overview:

Ajax Engineering is a top player in India’s concrete equipment sector. According to the Redseer Report, the company has developed over 141 variants of concrete equipment, catering to various needs in the concrete application value chain. Over the last decade, Ajax Engineering has sold more than 29,800 concrete equipment units nationwide.

The Indian concreting equipment market remains fragmented and informal, with a mix of manual and mechanized solutions. However, India’s share of mechanized concreting equipment has grown from 16% in FY 2019 to 25% in FY 2024 (excluding manual mixers), reflecting increasing adoption. As of September 30, 2024, Ajax Engineering operates four manufacturing facilities in Karnataka, specifically in Obadenahalli, Gowribidanur, and Bashettihalli. Each facility focuses on different product categories, particularly Obadenahalli, which specializes in advanced equipment.

The company has also built a loyal and expanding customer base, growing from 11,100 customers in 2022 to 12,100 in 2023, 15,700 in March 2024, and now over 19,000 customers as of September 2024. This strong customer network contributes to repeat business and sustained revenue growth.

Financial Strength

As of September 30, 2024, Ajax Engineering Limited reported total assets of ₹1,348.76 crore, reflecting steady growth from ₹1,236.14 crore in March 2024, ₹966.73 crore in March 2023, and ₹735.31 crore in March 2022. The company’s revenue for the first half of FY25 (April–September 2024) stood at ₹769.98 crore, following a strong ₹1,741.40 crore revenue in FY24, compared to ₹1,151.12 crore in FY23 and ₹763.28 crore in FY22.

Ajax Engineering’s profit after tax (PAT) has shown consistent growth, reaching ₹101.02 crore as of September 2024, following ₹225.15 crore in FY24, ₹135.9 crore in FY23, and ₹66.21 crore in FY22. The company’s net worth increased to ₹995.84 crore as of September 2024, up from ₹917.96 crore in March 2024, ₹713.8 crore in March 2023, and ₹578.27 crore in March 2022.

SWOT Analysis

STRENGTHS	WEAKNESSES
Market Leadership: Ajax holds a significant market share in India’s SLCM segment. Diverse Product Portfolio: Offers a wide range of concrete equipment catering to various needs. Strong Customer Base: Established relationships with over 19,000 customers.	Revenue Concentration: A substantial portion of revenue comes from SLCMs; any decline in demand could impact financials. Geographical Concentration: All manufacturing facilities are located in Karnataka, exposing the company to regional risks.
OPPORTUNITIES	THREATS
Infrastructure Growth: India’s expanding infrastructure sector presents growth opportunities. Product Diversification: Potential to expand into new product lines and markets.	Market Competition: Facing competition from both domestic and international players. Economic Factors: Economic downturns or policy changes could affect the construction industry and, consequently, demand for equipment.

Final Thoughts

The Ajax Engineering IPO presents an opportunity to invest in a leading construction equipment company. With strong financials, a growing customer base, and a well-established market position, the company is in a strong position. However, investors should be mindful of the company’s revenue concentration, competition, and external economic risks before deciding.

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