Ajax Engineering IPO Day 2 Highlights: Issue booked 49%. Check Ajax IPO GMP, review, issue details, more

The initial public offer of Ajax Engineering IPO has been subscribed 49% on the second day of subscription today, at 17:00 IST, as per BSE data.

The initial share sale received bid for 68,88,960 shares against 1,41,49,997 shares on offer, according to BSE.

The portion for retail investors received 52% subscription while the quota for non-institutional investors got subscribed 61%. The qualified institutional buyers (QIBs) is booked 33%. The employee portion has been subscribed 1.19x.

The company will not receive any proceeds of thecOffer. Each of the Selling Shareholders will be entitled to the respective proportion of proceeds of the Offer for Sale after deducting its portion of the Offer related expenses and the relevant taxes thereon.

The initial public offer of Ajax Engineering IPO has been subscribed 46% on the second day of subscription today, at 16:00 IST, as per BSE data.

The initial share sale received bid for 64,37,861 shares against 1,41,49,997 shares on offer, according to BSE.

The portion for retail investors received 49% subscription while the quota for non-institutional investors got subscribed 52%. The qualified institutional buyers (QIBs) is booked 33%. The employee portion has been subscribed 1.12x.

AEL has a lean asset light business model with 4 operational and 1 upcoming manufacturing facilities and has a largest 51 dealer and distribution network in India and 25 international with a cumulative network of 19000 customers relationships diversified across India.

The organisation stands out as a top manufacturer of concrete equipment, offering an extensive array of products, services, and solutions throughout the concrete application value chain, according to the Redseer Report. By September 30, 2024, the company has created more than 141 different variants of concrete equipment that address the needs of the concrete application value chain, and in the past decade, they have sold upwards of 29,800 concrete equipment units in India.

They are a leading manufacturer of SLCMs in India, with an approximately 77%, 75%, 77% and 86% market share in the SLCM market in India in terms of number of SLCMs sold during the six months period ended September 30, 2024 and Financial Years 2024, 2023 and 2022, respectively.

The initial public offer of Ajax Engineering IPO has been subscribed 42% on the second day of subscription today, at 14:42 IST, as per BSE data.

The initial share sale received bid for 59,26,157 shares against 1,41,49,997 shares on offer, according to BSE.

The portion for retail investors received 46% subscription while the quota for non-institutional investors got subscribed 43%. The qualified institutional buyers (QIBs) is booked 33%. The employee portion has been subscribed 1x.

India's per capita cement consumption is ~50% lower than the global average. Concreting in the country is largely manual and is fraught with multiple challenges and inefficiencies, increasing the importance of mechanization in the segment.

Events such as global supply chain issues, exacerbated by events like the COVID19 pandemic, can lead to shortages of raw materials and components. This can delay production schedules and increase costs, impacting manufacturers' ability to meet customer demands. Additionally, disruptions in dealer networks, logistic and transportation can adversely affect concrete equipment industry. Any disruptions or stoppages at the facilities of concrete equipment manufacturers could adversely impact their operations, financial condition, and results of operations.

The initial public offer of Ajax Engineering IPO has been subscribed 39% on the second day of subscription today, at 13:33 IST, as per BSE data.

The initial share sale received bid for 54,50,793 shares against 1,41,49,997 shares on offer, according to BSE.

The portion for retail investors received 44% subscription while the quota for non-institutional investors got subscribed 42%. The qualified institutional buyers (QIBs) is booked 26%. The employee portion has been subscribed 91%.

• Market leader in a large and fast-growing SLCM market.
• Leading concrete equipment company with over 141 concrete equipment variations, and offering services and solutions across the concrete application value chain.
• Engineering-focused concrete equipment company with strong in-house design and development capabilities.
• Technology-led assembly and manufacturing processes and robust supplier network.

The entry of numerous domestic and international players has intensified competition within the industry. This pressure may lead to price wars and reduced profit margins, making it difficult for manufacturers to maintain profitability while investing in innovation and quality. Additionally, efforts to diversify their revenue mix by increasing sales of other concrete equipment may not be successful on account of intense competition domestically as well as globally.

• Middle East
• Africa
• Southeast Asia
• Latin America
• Eastern Europe

For the last three fiscals, the company has posted an average EPS of Rs. 8.83 (basic) and an average RoNW of 15.77%. The issue is priced at a P/BV of 7.23 based on its NAV of Rs. 87.04 as of September 30, 2024, as well as on post-IPO basis.

The company reported PAT margins of 8.58% (FY22), 11.59% (FY23), 12.65% (FY24), 12.72% (H1-FY25) and RoCE margins of 15.52%, 25.31%, 32.82%, 13.84% for the referred periods, respectively.

Recommendation : Subscribe for Long Term

The initial public offer of Ajax Engineering IPO has been subscribed 35% on the second day of subscription today, at 12:00 IST, as per BSE data.

The initial share sale received bid for 51,42,616 shares against 1,41,49,997 shares on offer, according to BSE.

The portion for retail investors received 41% subscription while the quota for non-institutional investors got subscribed 39%. The qualified institutional buyers (QIBs) is booked 26%. The employee portion has been subscribed 85%.

As per Anand Rathi Research, the company's potential market is expanding more rapidly due to government initiatives in infrastructure, which is beneficial for the business. Conversely, the promoter group is required to divest shares over the next three years to lower their stake to 75% or less, as it currently stands at 82% after the issue. Nonetheless, the company specializes in niche construction equipment and possesses strong financials.

 From a valuation perspective, based on FY24, it is targeting a PE of 32 times, and the post-issue market capitalization is estimated at ₹71,961 million, making the issue fairly priced. Given the aspects like being a market leader in SLCM's products, having a presence across the entire concrete application value chain, and maintaining stable top and bottom lines, the brokerage suggests considering the issue as a "SUBSCRIBE for LONG TERM."

Ajax Engineering ltd, since its incorporation 32 years ago, the company has built a diverse portfolio of concrete equipment covering the entire concrete application process. Its product lineup includes self-loading concrete mixers (SLCMs) and batching plants for concrete production, transit mixers for transportation, and various pumps boom pumps, concrete pumps, and self-propelled boom pumps—for concrete placement. 

Additionally, it offers slipform pavers for concrete paving and 3D concrete printers for precision deposition. As of September 30, 2024, the company provides over 141 equipment variants, serving the complete concrete application value chain.

The initial public offer of Ajax Engineering IPO has been subscribed 35% on the second day of subscription today, at 11:18 IST, as per BSE data.

The initial share sale received bid for 49,70,323 shares against 1,41,49,997 shares on offer, according to BSE.

The portion for retail investors received 39% subscription while the quota for non-institutional investors got subscribed 38%. The qualified institutional buyers (QIBs) is booked 26%. The employee portion has been subscribed 79%.

As of September 30, 2024, the company has sold concrete equipment and spare parts, and has built relationships with over 19,000 customers, up from more than 15,700 customers as of March 31, 2024, over 12,100 customers as of March 31, 2023, and more than 11,100 customers as of March 31, 2022.

• All of the company's assembly and manufacturing operations are situated in Karnataka, which could expose them to regional risks that might negatively impact their business, operational results, financial status, and cash flows.
• The company has experienced rapid growth, and they may struggle to maintain their historical growth rates moving forward. Any failure to effectively manage their growth or to execute their growth strategy promptly, or within budgetary constraints, could adversely affect their business, operational results, financial status, and cash flows.