Carraro India Raises Rs 375 Crore from Anchor Investors Before Upcoming IPO Launch

Carraro India Ltd, a producer of transmission systems for off-highway vehicles, has secured Rs 375 crore from anchor investors before its IPO opens. The company has allocated 53.27 lakh shares to 33 funds at Rs 704 each, the top end of the price range. This transaction totals Rs 375 crore. The IPO, priced between Rs 668-704 per share, will be available for public subscription from December 20 to December 24.

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The IPO is entirely an offer for sale (OFS) by Carraro International SE, with no new shares being issued. Consequently, all proceeds will go to the selling shareholder. Half of the shares are reserved for qualified institutional buyers, 35% for retail investors, and the remaining 15% for non-institutional investors.

Anchor Investors and Financial Growth

Aditya Birla Sun Life Mutual Fund, HSBC MF, UTI MF, Sundaram MF, Motilal Oswal MF, Kotak Mahindra Life Insurance Company, Bajaj Allianz Life Insurance Company, Tata AIA Life Insurance Company, and SBI General Insurance Company are among the anchor investors. According to a circular on BSE's website, these investors have shown significant interest in Carraro India's offering.

Financially, Carraro India reported a revenue increase of 4.44% to Rs 1,770.45 crore in FY24 from Rs 1,695.12 crore in FY23. Profit after tax also rose by 29.44%, reaching Rs 60.58 crore in FY24 compared to Rs 46.80 crore in FY23.

Company Background and Operations

Founded in 1997 as a subsidiary of Carraro S.p.A., Carraro India began manufacturing transmission systems in 1999 and axles in 2000. It operates two plants in Pune dedicated to drivelines and gears. These facilities use advanced technology for various processes like casting and machining.

Carraro India supplies products to 38 manufacturers domestically and six internationally as of September 2024. Its clientele includes major OEMs such as CNH, TAFE, Mahindra and Mahindra, John Deere India Pvt Ltd, Escorts Kubota, Action Construction Ltd, and International Tractors Ltd.

In the construction vehicle sector, it serves companies like CNH, Bull Machines, Liugong, Manitou Equipment, Doosan, Escorts Kubota, Mahindra and Mahindra, and Action Construction Ltd. The company exports directly within Asia and through Carraro Drive Tech Italia outside Asia.

IPO Management and Future Prospects

Axis Capital Ltd., BNP Paribas, and Nuvama Wealth Management Ltd are managing the IPO process as book-running lead managers. The company's focus on engineering solutions for OEMs positions it well for future growth in both domestic and international markets.

Carraro India's strategic operations and robust client base underline its potential for continued success in the transmission systems industry. With its upcoming IPO and strong financial performance, the company is poised to strengthen its market position further.