As of the second day of bidding, the Initial Public Offering (IPO) for Kross Ltd, an auto parts manufacturer based in Jamshedpur, has been fully subscribed with a subscription rate of 2.56 times, according to data from the Bombay Stock Exchange (BSE). This follows the company’s strong performance on the first day, where it achieved 88% subscription.
The retail investor segment has been the primary driver of this subscription surge, with a subscription rate of 3.88 times. Non-institutional investors (NIIs) also showed strong interest, subscribing 2.87 times. However, Qualified Institutional Buyers (QIBs) have subscribed only 2% of the shares available for them, suggesting that institutional investors may be waiting for later stages.
Main Points
Kross IPO Subscription Status Overview:
- Total Subscription: 2.56 times
- Retail Investors: 3.88 times
- Non-Institutional Investors (NIIs): 2.87 times
- Qualified Institutional Buyers (QIBs): 2%
The IPO, with a price band set between ₹228 and ₹240 per share, opened for subscription on Monday, September 9, 2024, and is expected to close on September 11, 2024. Investors have bid for 3,93,05,334 shares against an offer size of 1,53,50,877 shares.
IPO Size and Allocation
Kross Ltd is offering a mix of fresh equity shares worth ₹250 crore along with an Offer-for-Sale (OFS) from promoters, which also amounts to ₹250 crore. The primary objectives of the IPO include repaying debt, funding capital expenditures, and meeting general corporate purposes. The company has already raised ₹150 crore from anchor investors prior to the IPO launch.
The share allocation has been structured as follows:
- 50% reserved for QIBs
- 35% reserved for retail investors
- 15% reserved for NIIs
Grey Market Premium and Future Outlook
As per market reports, the Grey Market Premium (GMP) for Kross Ltd’s shares stands at ₹48, suggesting a potential listing price of around ₹288, which is 20% above the upper price band of the IPO. Analysts have expressed optimism about the listing performance given the rising GMP in recent trading sessions.
Company Background and Financials
Founded in 1991, Kross Ltd specializes in producing high-performance, safety-critical components for medium and heavy commercial vehicles (M&HCV) and the agricultural sector. The company has shown a robust growth trajectory, with a CAGR of 44.4% in revenue and a 65.5% increase in EBITDA between FY22-24.
Expert Recommendations
Analysts from major brokerage firms such as SBICAP Securities Ltd and Canara Bank Securities Ltd have recommended subscribing to the IPO for long-term gains. While they acknowledge certain risks, such as customer concentration (with the top five customers contributing 66% of revenue), they highlight the company’s growth potential and strong fundamentals.
Kross Ltd’s IPO is expected to close on September 11, 2024, and its shares will be listed on both the BSE and NSE.
