Kross IPO booked over 6 times on Day 3 so far; NIIs portion subscribed 11x

The initial public offering (IPO) of Kross Ltd continued to attract a decent response from the investors during the third and final day of the bidding process. The issue managed to sail through on the first day of the bidding, as it was booked 95 per cent and ended day two day with nearly 3 times bids.
 

The Jamshedpur-based Kross is selling its shares in the price band of Rs 228-240 apiece. Investors can apply for a minimum of 62 shares and its multiples thereafter. It is looking to raise Rs 500 crore via IPO, which includes a fresh share sale of Rs 250 crore, and an offer-for-sale (OFS) of up to 1.04 crore equity shares.
 

According to the data, the investors made bids for 9,72,94,120 equity shares, or 6.34 times, compared to the 1,53,50,877 equity shares offered for the subscription by 13.30 pm on Wednesday, September 11. The three-day bidding for the issue, which kicked-off on Monday, September 9, concludes today.
 

The allocation for non-institutional investors (NIIs) was subscribed 11.10 times, while the portion reserved for retail investors saw a subscription of 7.20 times. However, the quota set aside for qualified institutional bidders (QIBs) was subscribed 1.26 times as of the same time.
 

Kross Ltd, formerly known as Kross Manufacturers (India) was established in 1991. It manufactures and supplies trailer axles and suspensions and a wide range of high-performance forged and precision machined safety critical parts for medium and heavy-duty commercial vehicles (M&HCV) and agricultural equipment.
 

The grey market premium of Kross has remained stable despite the rising volatility in the broader markets. Last heard, the company was commanding a premium of Rs 48-50 per share in the unofficial market, suggesting a listing pop of about 21 per cent for the investors.
 

A rapidly growing player in the organized trailer axle manufacturing industry, with backward integration capabilities. long-term relationships with major domestic and global clients. Consistent growth in revenue, profit, and margins, with a favorable debt-to-equity ratio, said Swastika Investmart.
 

"The IPO's valuation is relatively high. Considering the premium valuation and potential challenges in the current market, we recommend a neutral rating for the IPO," it said.
 

For the year ended on March 31, 2024, Kross Ltd reported a net profit of Rs 44.88 crore with a revenue of Rs 621.46 crore. The company reported a net profit of Rs 30.93 crore with a revenue of Rs 489.36 crore. The company will command a total market capitalization of close to Rs 1,550 crore.
 

Ahead of its IPO, Kross raised Rs 150 crore from anchor investors by allocating 62,49,999 shares at Rs 240 apiece. Kross Ltd has reserved 50 per cent of the net offer for qualified institutional bidders (QIBs), while 15 per cent of the shares have been reserved for non-institutional investors (NIIs) and retail investors will get 35 per cent and 35 per cent of the net offer.
 

Kross is a diversified firm specializing in the manufacturing and supply of trailer axles, suspension assemblies, and a wide range of forged and precision-machined, high-performance safety-critical parts for M&HCV and farm equipment. Kross has successfully attracted major customers, including a leading automobile OEM and an Indian farm equipment OEM, said Choice Broking.
 

"Kross is asking for an EV/sales ratio of 2.3 times, which is in-line to the peer average. The company's performance is closely tied to the growth of its end industries; any negative impact on these sectors could affect the company’s business. Thus, we recommend a 'subscribe with caution' rating for this issue," it said.
 

Equirus Capital is the book running lead manager of the Kross IPO, while Kfin Technologies is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE, with Monday, September 16 as the tentative date of listing at the bourses.