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PremiumAjax Engineering IPO Day 2 Highlights: 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.
On the first bidding day, Ajax Engineering IPO subscription status was 28%.
The public offering of Ajax Engineering, a concrete equipment manufacturer backed by Kedaara Capital, runs subscription from February 10 to 12.
Ajax Engineering IPO price band has been established at ₹599 to ₹629 per share. The company announced on Friday that it has raised over ₹379 crore from anchor investors, just ahead of the initial share-sale launch.
Ajax Engineering IPO consists entirely of an offer-for-sale (OFS) of 2.01 crore shares, which amounts to ₹1,269 crore at the highest price point, offered by its promoters and an investor shareholder. In this OFS, Kedaara Capital plans to sell 74.37 lakh shares. Since the public offering is fully an OFS, Ajax Engineering will not gain any funds from the IPO. The company's market capitalization has been estimated at ₹7,200 crore at the upper limit of the price range.
Ajax Engineering is a prominent manufacturer of concrete equipment, offering an extensive array of related products, services, and solutions throughout the concrete application value chain.
The company has four assembly and manufacturing plants located in Karnataka, with each facility focusing on different product lines. The book running lead managers for the issue include ICICI Securities, Citigroup Global Markets India, JM Financial, Nuvama Wealth Management, and SBI Capital Markets.
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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%.
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.
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.
A lock-in period of 90 days will apply to 50% of the equity shares allocated to the anchor investors starting from the date of allotment, while the remaining 50% of the equity shares allotted to the anchor investors will have a lock-in period of 30 days beginning from the date of allotment.
The company has recognised Surin Automotive Private Limited as one of its Group Companies, as per the RHP.
The Indian market for concreting equipment is notably fragmented and informal, reflecting the diverse types of equipment and the different scales of projects carried out across the nation. Concreting equipment includes both manual and mechanised means for producing and distributing concrete, which is essential for the construction industry. As of FY 2024, approximately 25% of the concrete utilised in India is processed through mechanised concreting equipment (excluding manual mixers), an increase from around 16% in FY 2019.
The initial public offer of Ajax Engineering IPO has been subscribed 30% on the second day of subscription today, at 10:03 IST, as per BSE data.
The initial share sale received bid for 42,48,974 shares against 1,41,49,997 shares on offer, according to BSE.
The portion for retail investors received 32% subscription while the quota for non-institutional investors got subscribed 31%. The qualified institutional buyers (QIBs) is booked 26%. The employee portion has been subscribed 57%.
The company's listed peers are Action Construction Equipment Ltd (with a P/E of 46.13), BEML (with a P/E of 54.24), and Escorts Kubota Ltd (with a P/E of 35.73).
The promoters of the company include Krishnaswamy Vijay, Jacob Jiten John, Kalyani Vijay, Madhuri Vijay, Prashanth Vijay, Rachel Rekha Hansen, Savitha Christeena Alexander, Sean Alexander, Green Haven Trust, Ohana Trust, Jacob Hansen Family Trust, and The Johns Loaves Trust. Together, the promoters hold 100,537,600 equity shares, representing 87.88% of the company’s total issued, subscribed, and paid-up equity share capital.
The promoters of the company include Krishnaswamy Vijay, Jacob Jiten John, Kalyani Vijay, Madhuri Vijay, Prashanth Vijay, Rachel Rekha Hansen, Savitha Christeena Alexander, Sean Alexander, Green Haven Trust, Ohana Trust, Jacob Hansen Family Trust, and The Johns Loaves Trust. Together, the promoters hold 100,537,600 equity shares, representing 87.88% of the company’s total issued, subscribed, and paid-up equity share capital.
Given its strong growth prospects, moderate valuation, and alignment with India's infrastructure growth trajectory, we recommend SUBSCRIBING to this IPO for both listing gains and long-term investment opportunities, considering its robust fundamentals and market positioning.
Ajax Engineering is a leading manufacturer of SLCMs in India, holding an approximate market share of 75%. The company also offers a comprehensive range of 141 concrete equipment variants, services, and solutions across the concrete application value chain.
Ajax Engineering operates four assembly and manufacturing facilities located at Obadenahalli, Gowribidanur, Basethahalli, and Adinarayanahosahalli in Karnataka, with each facility specializing in distinct product lines.
The concrete equipment market in India, particularly for SLCMs, is experiencing significant growth driven by several factors, including increasing cement consumption and rising public and private capital expenditure in infrastructure, irrigation, housing, and renewable power projects, leading to higher demand for construction materials and equipment.
The issue is priced at a P/E ratio of 32.1x at the upper price band based on FY24 earnings, which is comparatively lower than its industry peers. Given the company’s strong financial performance, favorable industry growth drivers, and attractive valuation, we recommend a "SUBSCRIBE" rating for this issue.
Ajax Engineering IPO GMP today or Ajax IPO GMP is +16. This indicates Ajax Engineering share price was trading at a premium of ₹16 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Ajax Engineering share price was indicated at ₹645 apiece, which is 2.54% higher than the IPO price of ₹629 .
Grey market activity over the past eight sessions indicates that the current GMP ( ₹16) is trending lower. According to experts on investorgain.com, the lowest GMP is ₹0.00, and the maximum is ₹58.00.
Brokerage firm Anand Rathi has given ‘subscribe for long term’ rating to Ajax Engineering IPO. “On valuation parse, based on FY24 it is seeking PE of 32 times and post issue market cap comes at ₹71,961 Mn with the issue is reasonably priced. Therefore, given the factors like, market leading in SLCM’s products, present across all the concrete application value chain and stable top and bottom lines, we recommend the issue can be consider as ‘SUBSCRIBE for LONG TERM’, " the brokerage firm said.
The initial public offer of Ajax Engineering IPO has been subscribed 28% on the first day of subscription today, at 17:00 IST, as per BSE data.
The initial share sale received bid for 39,45,489 shares against 1,41,49,997 shares on offer, according to BSE.
The portion for retail investors received 29% subscription while the quota for non-institutional investors got subscribed 28%. The qualified institutional buyers (QIBs) is booked 26%. The employee portion has been subscribed 54%.
Given its dominant market share, bright growth prospects, strong dealer network, asset-light business model, nil debt and favourable industry outlook, we recommend to subscribe on a long-term basis.
Ajax Engineering is focused on growing its export business. The company had 25 dealers and distributors across South and Southeast Asia, the Middle East, and Africa, as of September 30, 2024. Ajax Engineering has exported equipment to 46 countries since April 1, 2019, and to 19 countries during the six months period ended September 30, 2024.
The company plans to increase exports to countries it does not currently serve over the next five years. As the first Indian company to manufacture and export slip form concrete pavers, Ajax Engineering is targeting South and Southeast Asia, the Middle East, and Africa for further expansion.
The initial public offer of Ajax Engineering IPO has been subscribed 19% on the first day of subscription today, at 16:21 IST, as per BSE data.
The initial share sale received bid for 26,93,783 shares against 1,41,49,997 shares on offer, according to BSE.
The portion for retail investors received 27% subscription while the quota for non-institutional investors got subscribed 24%. The qualified institutional buyers (QIBs) part is yet to be booked. The employee portion has been subscribed 52%.
Through its ‘Ajax Dealer Excellence Model,’ the company conducts initiatives to ensure dealer staff are well-equipped to assist customers and rewards dealers based on performance benchmarks and incentive parameters.
Infrastructure development is projected to propel the demand for mechanized concrete equipment in India and grow the industry from Rs61 bn to Rs178 bn over FY24-29. The concrete equipment market in India especially SLCMs is experiencing significant growth on account of several factors an increase in cement consumption and an increase in public and private capital expenditure towards infrastructure, irrigation, housing and renewable power projects, leading to increased demand for construction materials and equipment.
The company's financials have doubled over the past three years with increase in revenue from ₹763 Crs in FY22 to 1741 Crs in FY24 which grew by a CAGR of 51% while EBDITA and profit also grew higher at 74% and 84% with improved margins as mechanized concrete equipment’s are outperforming manual mixers and higher construction activity with significant push on transportation projects, irrigation projects and infrastructure development.
The company is reasonably priced compared to its industry peers, backed by solid financial performance with Revenue/PAT CAGR of 51%/84% from FY22 to FY24. With its dominant market share, growth trajectory, and favorable industry outlook, the company presents a compelling investment opportunity. Hence, We assign “SUBSCRIBE" rating.
Ajax Engineering is an engineering-focused concrete equipment company with a comprehensive portfolio of designed and developed concrete equipment and one of our significant innovations is the SLCM with a load cell technology that provides quality assurance in concrete production by enabling precise measurement of cement, water, sand, and aggregate. In 2019, it introduced patented self-propelled boom pump, designed to combine mobility and flexibility for efficient placement of concrete at varying heights and distances. enhances accessibility and accelerates construction timelines.
The initial public offer of Ajax Engineering IPO has been subscribed 15% on the first day of subscription today, at 14:39 IST, as per BSE data.
The initial share sale received bid for 21,12,044 shares against 1,41,49,997 shares on offer, according to BSE.
The portion for retail investors received 22% subscription while the quota for non-institutional investors got subscribed 17%. The qualified institutional buyers (QIBs) part is yet to be booked. The employee portion has been subscribed 44%.
Ajax has built a dealer-led distribution and service model over the years comprising of 51 dealerships across 23 states in India. As of Sept’24, the company possess the largest dealer network in India in terms of dealers and service touchpoints. Ajax is accessible to customers through 114 touchpoints including 51 dealer headquarters, 29 branches and 34 service centers managed and operated by the dealers.
"Based on this assumption we believe the company asks valuations seem reasonably priced compared to the industry it serves. Investors should also look at IPO offers which come with Rs.1269 cr/- OFS which is 100% of total issue which is an area of concern for new investors.
Given the company’s virtual monopoly in SLCM and increasing infrastructure development in India with rising demand for automated concrete solutions, we believe Ajax is well-positioned for catering to India’s booming construction and infrastructure sector. Hence, looking at all attributes we recommend investors to “SUBSCRIBE" for Ajax Engineering Ltd IPO for a long term basis," said Shinde.
Ajax’s customer base is tailored to specific applications of equipment and spanning specialized sectors such as transportation infrastructure, irrigation and infrastructure projects. The company has served over 19,000 customers as 1HFY25 respectively.
The initial public offer of Ajax Engineering IPO has been subscribed 13% on the first day of subscription today, at 13:30 IST, as per BSE data.
The initial share sale received bid for 17,96,392 shares against 1,41,49,997 shares on offer, according to BSE.
The portion for retail investors received 19% subscription while the quota for non-institutional investors got subscribed 13%. The qualified institutional buyers (QIBs) part is yet to be booked. The employee portion has been subscribed 36%.
On valuation parse, based on FY24 it is seeking PE of 32 times and post issue market cap comes at ₹71,961 Mn with the issue is reasonably priced. Therefore, given the factors like, market leading in SLCM’s products, present across all the concrete application value chain and stable top and bottom lines, we recommend the issue can be consider as “SUBSCRIBE for LONG TERM".
