Craftsman Automation has been a consistent engineering corporation. It has started its working from 1986 and has served the companies domestically as well as internationally for more than 35 years. The company specialises in manufacturing of engineering products used for multiple purposes. The company has its own manufacturing facilities. They are located at 7 different locations. Total 12 manufacturing units are set up. The company leads the manufacturing of cylinder blocks used in installation of a tractor.
The company has eight sub segments under its purview. It involves :
- Automotive Powertrain
- Sheet Metal Fabrication
- SPM Manufacturing
- Industrial and Engineering products
- Gear and Gear Boxes
- Aluminium Castings for power transmission
- Tool Room and Mould Base
- Automotive Aluminum
The major clients for the company are :
- Royal Enfield
- Mahindra and Mahindra
- Tata Motors
- Ashok Leyland
- Tata Cummins
- TAFE tractors and many more.
Craftsman Automation IPO Details
The IPO is set to get launched on 15th March, 2021. The subscription timeline extends till 17th march, 2021. The size for Craftsman Automation IPO is 823.70 Crore Rs. Shares issued through Offer for sale are 673.70 Crore Rs. Shares worth 150 Crore Rs are issued through Fresh issue. The minimum lot size is 10 shares and the price is set at 1488 Rs. – 1490 Rs./ share. The company is going to get listed at both the exchanges NSE and BSE. The face value per share is Rs. 5 and this is a book built issue. The registrar for the company is Link Intime India Private Limited.
Tabular Representation of IPO Details
|IPO OPENING DATE||15th March, 2021|
|IPO CLOSING DATE||17th March, 2021|
|ISSUE TYPE||Book Built Issue|
|Face Value per share||5 Rs per share|
|IPO price band||1488 to 1490 Rs per share|
|LOT SIZE||10 shares|
|MINIMUM ORDER QUANTITY||10 shares|
|ISSUE SIZE||823.7 Crore Rs.|
|OFFER FOR SALE||673.7 Crore Rs.|
|FRESH ISSUE||150 Crore Rs.|
|LISTING AT||BSE, NSE|
|LISTING DATE||25th March, 2021|
Lot Size Details
The lot size decided for Craftsman Automation IPO is as follows :
The minimum lot size decided is 10 Shares per lot. The amount behind this subscription is 14900 Rs. Hence the minimum investment for subscription is 14900 Rs. The maximum subscription amount is set at 193700 Rs. This amounts to 13 lots equaling 130 Shares.
|No. of lots and total shares||Amount|
|Minimum||1 lot – 10 shares||14900 Rs.|
|Maximum||13 lots – 130 shares||193700 Rs.|
|IPO OPENING DATE||15th March, 2021|
|IPO CLOSING DATE||17th March, 2021|
|IPO ALLOTMENT DATE||22nd March, 2021|
|REFUNDS||23rd March, 2021|
|DEMAT A/C CREDITED ON||24th March, 2021|
|IPO LISTING DATE||25th March, 2021|
The IPO begins for subscription from 15th march, 2021. The IPO subscription would continue till 17th March, 2021. The allotment status for the shareholders who applied would come on 22nd March, 2021. The refunds for the ones who did not get allotment would be initiated on 23rd March 2021. The DEMAT accounts of shareholders would be credited on 24th March, 2021. The listing of the company would be accompanied on 25th March, 20121.
Promoter and Lead Managers
The sole person as promoter for the company is Ravi Srinivasan. The holding on part of the promoter before IPO allotment was 63.40%. The post-IPO promoter holding would equal 59.76%.
The lead managers for the company are :
- Axis Capital limited
- IIFL Capital Holdings
Objectives for the Craftsman Automation IPO
The objectives behind the IPO are listed :
- The company has a long list of debt. The company wants to pay off its borrowings from this public issue so that the interest payments decrease over time. Craftsman has a shortage of liquidity to pay off its borrowings right now. Also the company wants to get back to its levels of 2017-18 which require less outgoing liquidity and more liquidity staying in the business rotation cycle.
- The funds can also be utilized to fulfill some general corporate expenses of the company.
|Particulars (in Million Rs.)||2019-20||2018-19||2017-18|
Looking at the financials the company looks very vulnerable at this point of time. The company has a fluctuating flow of net profits over the years along with assets and revenue.
The company’s asset base was close to 20000 Million Rs in 2017-18 which was increased to almost 23253 Million rs in 2018-19. This was a just jump for the company from an earlier position. This gives an intimation that the company is trying to expand itself over years. But suddenly in the upcoming year the company decreases its assets by almost 100 million Rs. The decline does not raise red flags but stagnation does. This says that the company has not expanded itself since the last 3 years and is stagnant at one stage.
Revenue and Net Profits
The revenue of the company is increasing at a sudden pace with improvement in asset base. If you look at 3000 Million Rs increase in assets rendered almost the same amount of increase in revenue. The revenue of the company provided immense and spontaneous increase in net profits. The net profits in 2018-19 tripled from 2017-18. The 17-18 figures indicate 317 Million Rs of profits and the 18-19 figures show 974 Million Rs in profits. This is an excellent indication for any company.
But suddenly in 2019-20 the company somehow failed to achieve its objectives or was stuck into high interest payments. This resulted in decrease in net profits by almost 500 Million Rs. The revenue also shrunk by 3000 Million Rs. Hence the company is under huge debt and would take a while to get back to its previous levels of profits and revenue.
The current and updated figures from 2020-21 display that the company has earned almost 500 Million Rs by the end of Sept. Quarter. The assets have however decreased by another 1000 Million Rs but the revenues have achieved 10000 Million Rs. mark. Hence it is to be noted how the company utilizes this public fund and gets back on the path of expansion. The reason is net profits and revenue would increase or decrease but the assets and new installments would render new opportunities in future.
- Company has excellent manufacturing facilities and is a leader in manufacturing engineering products in India.
- Craftsman has a long client list. All those clients are listed and well known companies with expansion plans. Hence the company will benefit from the expansion of those companies.
- The company has a diversified product portfolio.
- The red flags are raised by the financial figures displayed by the company in the past 3 years. Due to unstable and diminishing growth the company may face some problems in the next 2 years. However with an IPO fund the possibility for quick revival and better expansion plans are possible.
How to Apply for IPO with Zerodha
It is very easy to apply for an IPO now if you have a DEMAT account with Zerodha. Follow the steps below for the same :
- Logging into Zerodha console through its website or KITE platform.
- Clicking the IPO link present in the Portfolio section
- Click the Craftsman Automation IPO button and press the BID button
- Entering the details asked for like UPI ID, Quantity and price
- Submit the application form of IPO
- Visiting the application of UPI for approving the transaction
Now, applying for IPO online is possible with most of the Discount and online brokers.