Indo Farm Equipment to Raise ₹260 Crore in IPO Starting Dec 31

Share Product Published - 27 Dec 2024 by Tractor Junction

Indo Farm Equipment to Raise ₹260 Crore in IPO Starting Dec 31

Indo Farm Equipment Ltd, a tractor manufacturer based in Chandigarh, plans to raise between Rs 247 cr to Rs 260 cr through its IPO. The IPO is scheduled to go live on the stock exchange on Dec 31. It includes a fresh issue of 8.6 million equity shares and an offer for sale of 3.5 million shares by existing promoters. Additionally, the face value of each share is Rs 10, with the price band set between Rs 204 and Rs 215 per share.

Company Revenue and Product Portfolio

In FY24, Indo Farm’s operating revenue stood at Rs 375 crore. The company aims to surpass Rs 500 cr in turnover by FY25-26. Moreover, Indo Farm manufactures tractors under the Indo Farm and Indo Power brands, offering models ranging from 16 HP to 100 HP. The tractors are priced between Rs 3 lakh and Rs 12 lakh. The company also manufactures harvester combines, rotavators, and other agricultural equipment, as well as tractors.

Investments in Facilities and Financing

Over the past two decades, Indo Farm has invested approximately Rs 200 crore in its production facilities located in Baddi, Himachal Pradesh. Notably, these facilities have an annual production capacity of 12,000 tractors and 1,280 cranes. Joint-managing director Anshul Khadwalia emphasized Indo Farm's commitment to maintaining internal production techniques. Foundry operations, gear shops, machining, gearbox assembly, fabrication, hydraulics, and engine manufacture are a few examples.

To strengthen its financing options for farmers purchasing tractors, the company plans to invest Rs 45 cr in its non-banking financial company, Barota Finance. This will therefore increase sales and increase farmers' access to tractors.

Expansion Plans and Market Growth

Indo Farm plans to double its dealership network from the current 170 dealerships to over 340 within the next two to three years. As a result, the company aims to increase sales from 4,500-5,000 units to 6,500 units post-IPO. By FY27, annual sales will reach 10,000 units. By FY27, annual sales will reach 10,000 units.

Recently, the company launched a new tractor model for the European market and 2 new models for the Indian market. Additionally, Indo Farm is developing a prototype for an electric tractor, which is expected to be ready for commercial production by FY26-27.

Competitive Landscape and Future Outlook

Indo Farm competes with industry giants like Mahindra, Escorts Kubota, John Deere, and TAFE in the tractor market. Similar to this, firms like Bauer AG, Liebherr-International AG, and Escorts Kubota compete with it in the crane market. The business is optimistic about its growth prospects in spite of its intense competition.

The Indian agricultural tractor market will grow at a CAGR of 6.70%, reaching USD 7.42 billion by 2024. Moreover, rising household incomes and increasing demand for higher-HP tractors are key drivers of this growth. Indo Farm aims to capitalize on these trends to strengthen its position in the market and achieve its revenue targets.

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