Craftsman Automation, a manufacturer of automotive components, raised Rs 247 crore from anchor investors ahead of its IPO on March 15. According to a BSE circular, the company’s IPO committee has agreed to assign a total of 16.58 lakh shares at Rs 1,490 to 21 anchor investors after consulting with merchant bankers. Some of the anchor investors are HSBC Global Investment Funds, Tata Mutual Fund (MF), Aditya Birla Sunlife MF, Nomura Trust and Banking Co Ltd, Max Life Insurance Co Ltd, etc.
Five IPOs are expected to launch next week, in addition to the ongoing Anupam Rasayan. Laxmi Organic Industries, Craftsman Automation, Nazara Innovations (backed by Rakesh Jhunjhunwala), Suryoday Small Finance Bank, and Kalyan Jewellers India are among them. Shah advised investors to be vigilant during such periods because even low-quality issues can attract massive subscriptions. Before keeping these companies for the long term, it is better to determine based on one’s own risk appetite and liquidity requirements.
According to analysts, the current bull market rally is in line with the ongoing excitement in primary markets through IPOs, FPOs, and OFS. Retail investors are the most enthusiastic about these IPOs, with approximately 78 percent of total stock listings in FY21 seeing first-day returns, the highest level in at least three years.
The public offering will be priced between Rs 1,488 and Rs 1,490 per share. Craftsman Automation shares were trading at Rs 1,660 in the grey market on Saturday, a premium of Rs 170 or 11.4 percent over the issue price. Canara Bank Securities analysts have assigned the problem a long-term ‘subscribe’ rating based on the company’s financial success and de-risked business. Craftsman Automation has been providing Tata Motors and Tata Cummins with products and solutions for over ten years. Daimler India, Tata Motors, Tata Cummins, Mahindra & Mahindra, Royal Enfield, Mitsubishi Heavy Industries, Siemens India, Escorts, Ashok Leyland, Simpson & Company, etc are some of the company’s main customers.
LKP Securities has also given this IPO a ‘subscribe’ ranking, citing its potential for top-line growth, competitive advantage, superior profitability over peers, prudent cost control, return ratios, global clientele, strong R&D base, and technological progress.