The initial public offering (IPO) of Craftsman Automation has been subscribed 55 percent on March 15, the first day of the bidding process. The offer received bids for 21.31 lakh shares as against the offer size of 38.69 lakh equity shares.

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The reserved portion for retail investors was subscribed 1.06 times and that of non-institutional investors was subscribed 9 percent. Qualified institutional buyers have not started putting in bids for the offer, according to the subscription data available on exchanges.

Craftsman Automation IPO opened for subscription at a price band of Rs 1,488-1,490 per share. The issue, which closes on March 17, consists of a fresh issue of shares worth Rs 150 crore and an offer for sale of 45,21,450 equity shares by existing shareholders.

The company on March 12 already raised a little over Rs 247 crore from anchor investors ahead of its initial share-sale.

The company's IPO committee in consultation with merchant bankers has decided to allocate a total of 16,58,447 shares at Rs 1,490 to 21 anchor investors, aggregating to Rs 247.10 crore, a BSE circular said.

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The company’s promoter Srinivasan Ravi will sell 1,30,640 equity shares, and investors Marina III (Singapore) Pte Ltd and International Finance Corporation will divest 15,59,260 equity shares and 14,14,050 equity shares, respectively, through the offer for sale (OFS) route. Individual shareholder K Gomatheswaran will sell 14,17,500 equity shares via OFS.

The promoter shareholding after the issue would reduce to 59.76 percent from 63.40 percent at present.

The company intends to use the proceeds of the fresh issue to retire around Rs 120 crore of debt.

Craftsman Automation is a diversified engineering company with vertically integrated manufacturing capabilities, engaged in 3 business segments namely, Automotive - Powertrain and Others, Automotive – Aluminium Products, and Industrial and Engineering.

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On the back of the company’s strong financial performance, growth potential in automotive aluminum and storage divisions and M&HCV segment rebound, most brokerages have recommended subscribing to the issue.

“Craftsman Automation is a play on revival in the automotive industry, especially M&HCV space. With a lumpy capex cycle behind it & a focus on debt reduction, it is well poised to clock healthy returns ratios in FY22-23E. At IPO price, it is offered at reasonable forward valuations. We recommend Subscribe,” ICICI Direct said.

First Published:Mar 15, 2021 2:58 PM IST