Kross IPO subscribed 88% on Day 1 driven by retail investor interest with 1.50x subscription

Kross Ltd IPO subscription status: Kross Ltd, a Jamshedpur-based company specializing in manufacturing trailer axles and suspension assemblies, opened its Initial Public Offering (IPO) for subscription on September 9. The three-day IPO will close on September 11, with anchor investor bidding held on September 6.

As of September 9, on BSE the Kross IPO received bids for about 135.07 lakh shares out of the total 1.53 crore shares offered, meaning the overall subscription is 88%.

Retail Individual Investors (RIIs) have shown the most interest, bidding for 114.97 lakh shares out of 76.75 lakh reserved for them, making their subscription 1.50 times. Under the retail category, the majority of bids (40.97 lakh) were placed at the cut-off price.

Non-Institutional Investors (those investing more than ₹2 lakh) have bid for 19.93 lakh shares out of 32.89 lakh reserved, with a subscription of 61%. Among them, those investing more than ₹10 lakh bid for 1.80 lakh shares, and those bidding between ₹2-10 lakh bid for 2.56 lakh shares.

Qualified Institutional Buyers (QIBs) have shown very limited interest, with only 15,748 shares bid for out of the 43.86 lakh available, indicating no significant demand from this category.

The IPO, valued at ₹500 crore, included a fresh equity issue of up to ₹250 crore and an offer for sale (OFS) of up to ₹250 crore by the company’s promoter shareholders. As part of the OFS, Sudhir Rai and Anita Rai will be reducing their stakes in the company.

The shares of Kross IPO is currently trading at a premium of ₹50, as per market investors.

Founded in 1991 as Kross Manufacturers (India) Private Limited, Kross Ltd specializes in producing trailer axles, suspensions, and precision-engineered safety-critical components for medium and heavy-duty commercial vehicles (M&HCV) and agricultural equipment.

The company reported an increase in its net profit for FY24 by 45.1 per cent to ₹44.9 crore. Revenue also saw a 27 per cent jump, reaching ₹620.3 crore. Kross’s EBITDA rose by 40.4 per cent to ₹80.8 crore, with a margin expansion of 120 basis points to 13 per cent.

Kross Ltd's future outlook and funds utilisation

Kross Ltd aims to use the proceeds from the IPO to fund capital expenditures, purchase machinery and equipment, repay debts, and support working capital and general corporate needs.

The company operates five manufacturing facilities in Jamshedpur and is a leading supplier of forged and machined components in India, with a growing export presence. Key clients include major OEMs such as Ashok Leyland and Tata International DLT, as well as new customers like Sweden's Leax Falun AB and a Japan-based OEM.

For the year ending March 2024, Kross Ltd reported a 27% year-on-year increase in revenue, reaching ₹620 crore, with net profits growing by 45% to ₹45 crore.