Akash Jha
Kross, a manufacturer of trailer axles and suspension assemblies, has submitted preliminary documents to the capital markets regulator in an effort to raise 500 million rupees [about $US4 billion] through an initial public offering.
The initial public offering (IPO) consists of two parts: the company’s new share issuance of Rs 250 crore, and the promoters’ offer-for-sale (OFS) of same amount.
In the OFS, Sudhir Rai, a promoter, and Anita Rai, a co-promoter, will sell shares valued at Rs 168 crore and Rs 82 crore, respectively.
The Jharkhand-based manufacturer of machined and forged components is also exploring the possibility of obtaining Rs 50 crore through pre-IPO placement. In the event that the proposed pre-IPO placement goes through, the size of the new offering will be lowered to Rs 50 crore.
Net proceeds from the fresh issuance would be used by the company to pay for working capital needs amounting to 30 crore rupees and machinery and equipment worth 70 crore rupees. New issue proceeds would also be used to cover debts of Rs 90 crore, with the remaining money being set aside for general corporate reasons.
For the fiscal year ending in March of FY23, the profit increased by 154.2 percent year-on-year to Rs 30.93 crore, led by solid topline and operating metrics. The Rai family promotes the company, which serves the M&HCV and farm equipment businesses.
Within the last fiscal year, operational revenue increased 64.3% year-on-year to 488.6 crore rupees. EBITDA, or earnings before interest, taxes, depreciation, and amortisation, surged by 95% to Rs 57.5 crore during the same time, resulting in a margin expansion of 184 basis points at 11.77 percent for the year.
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This fiscal year’s first quarter saw sales of Rs 143.7 crore and a profit of Rs 8 crore.
Ashok Leyland and Tata International DLT are just two of the prominent original equipment manufacturers (OEMs) with whom Kross has maintained steady partnerships for many years.
The merchant banker for the offering is Equirus Capital.
