The initial public offering (IPO) of auto parts manufacturer Kross Ltd, closing today, September 11, has seen strong interest, with the issue subscribed around 4 times so far. The IPO, which has a price band of Rs 228 to Rs 240 per share, received bids for 5,67,32,852 shares against the 1,45,83,333 shares on offer by 10:55 AM on the final day of bidding.
Subscription Details of Kross IPO
Non-Institutional Investors (NIIs): The category was subscribed 5.52 times.
Retail Individual Investors (RIIs): Their portion was subscribed 5.4 times.
Qualified Institutional Buyers (QIBs): This category received a minimal 0.03 times subscription.
Key Dates and Pricing of Kross IPO
The IPO opened for public subscription on September 9 and is set to close today. The share allotment for Kross Ltd is expected to be finalized on September 12, with shares scheduled to be listed on both the BSE and NSE on September 16.
Grey Market Premium of Kross IPO
Market observers report that Kross Ltd shares are trading Rs 50 higher in the grey market compared to the issue price. This grey market premium (GMP) suggests an anticipated 20.83% listing gain from the IPO.
Experts & Brokerages on Kross IPO
Commenting on the IPO domestic broking firm Anand Rathi says that considering all its business prospects and stable financial performance we recommend a “SUBSCRIBE for LONG TERM” rating to the IPO with higher risk appetite.
The report also adds Kross is undergoing a backward integration through axle beam extrusion, which could enhance margins and has secured firm exports orders that have improved revenue visibility. The company has relatively seen expansion in EBITDA and revenue margins over last two fiscals due to superior product mix and increase in-house production.
SBI Securities has issued a ‘subscribe for long-term’ rating for the Kross Ltd IPO, noting that the issue appears fairly valued based on the company’s strong growth track record. “We recommend subscribing to the issue for a long-term investment horizon,” SBI Securities mentioned in its IPO note.
Deven Choksey Research also assigned a ‘subscribe’ rating to the IPO, citing Kross Limited’s strong financial performance and focus on innovation. Kross Limited is well-positioned to capitalize on the demand for high-quality, safety-critical components.
“At the upper price band, the company is expected to trade at an adjusted PE multiple of 34x. With impressive growth metrics, competitive positioning, and high return ratios compared to peers, we assign a ‘SUBSCRIBE’ rating to Kross Limited’s IPO,” the firm stated.
Anchor Investments of Kross IPO
Ahead of the IPO, Kross Ltd raised Rs 150 crore from anchor investors, including EastSpring Investments, Matthews Asia Funds, LIC Mutual Fund, ICICI Prudential MF, Axis MF, Kotak Mahindra MF, Motilal Oswal MF, Edelweiss MF, and Max Life Insurance Company. These investors subscribed to 62.49 lakh equity shares at Rs 240 each, the upper end of the price band.
IPO Structure of Kross IPO
The IPO comprises a fresh issue of equity shares worth RS 250 crore and an Offer for Sale (OFS) of up to Rs 250 crore by the promoters. The OFS includes shares worth up to Rs 168 crore from Sudhir Rai and Rs 82 crore from Anita Rai.
The funds raised from the fresh issue will be utilized for purchasing machinery and equipment, repaying debt, funding working capital requirements, and general corporate purposes. Investors can bid for a minimum of 62 equity shares, with additional bids in multiples of 62 shares.
