Ajax Engineering Limited is coming up with an initial public offering (IPO) to provide an exit for its existing shareholders. This IPO is entirely an offer for sale (OFS) of 2.02 crore shares, aggregating up to ₹ 1,269.35 crores. The company is a leading manufacturer of concrete equipment, serving infrastructure and construction sectors. Should you invest in Ajax Engineering IPO? What are the strengths of the company, positive factors, risk factors investors should consider before investing in such IPOs? Lets do complete review and analysis.
Also Read: Top Smallcap Mutual Funds to invest in India
About Ajax Engineering Limited
Incorporated in July 1992, Ajax Engineering Limited is a prominent player in manufacturing a wide range of concrete equipment. The company has sold over 29,800 units in India in the last decade and has 51 dealerships across 23 states. It also has international presence with dealers and distributors across South and Southeast Asia, the Middle East, and Africa. The company operates four manufacturing facilities in Karnataka, ensuring a robust production and distribution network.
Competitive Strengths
- Market leader in the self-loading concrete mixer (SLCM) segment with over 75% market share.
- Strong product portfolio including batching plants, transit mixers, boom pumps, concrete pumps, and slipform pavers.
- Established brand reputation with a wide service network across India.
- Technological advancements in assembly and manufacturing processes.
- Strong in-house research and development (R&D) capabilities.
- Diversified customer base with long-term relationships in the construction equipment sector.
- Experienced management team with a deep understanding of industry trends.
Ajax Engineering IPO Information and Issue Details
- IPO Open Date: February 10, 2025
- IPO Close Date: February 12, 2025
- Listing Date (Tentative): February 17, 2025
- Issue Type: 100% Offer for Sale
- Price Band: ₹ 599 – ₹ 629 per share
- Lot Size: 23 shares
- Retail Minimum Investment: ₹ 14,467
- Retail Maximum Investment: ₹ 1,88,071
- Registrar: Link Intime India Private Limited
- Listing on: BSE and NSE
Company Financials
| Financials (in ₹ Crores) | Sep 2024 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|
| Assets | 1,348.76 | 1,236.14 | 966.73 | 735.31 |
| Revenue | 794.16 | 1,780.07 | 1,172.57 | 771.85 |
| Profit After Tax (PAT) | 101.02 | 225.15 | 135.90 | 66.21 |
| Net Worth | 995.84 | 917.96 | 713.80 | 578.27 |
| Reserves and Surplus | 984.40 | 906.52 | 702.36 | 575.41 |
| Total Borrowing | 0.00 | 6.23 | 10.14 | 7.16 |
Objects of the IPO
Since this Ajay Engineering IPO Size of ₹ 1,269 Crores is a complete offer for sale, the company will not receive any proceeds. The selling shareholders, including promoters and institutional investors, will offload their stakes to public investors.
P/E Ratio and Peer Comparison
- Pre-IPO EPS: 19.68
- Post-IPO EPS: 17.66
- Pre-IPO P/E Ratio: 31.96x
- Post-IPO P/E Ratio: 35.62x
Compared to its listed peers in the construction equipment sector like BEML Limited trading at P/E 54x (Highest) and Escorts Kubota Ltd trading at P/E 35.7x and industry average P/E of 45x, Ajax Engineering appears to be priced fairly. While the P/E ratio is slightly higher post-IPO, the company’s market dominance and financial growth provide justification for its valuation.
Reasons to Invest in Ajax Engineering IPO
- Strong leadership position in the SLCM market.
- Consistent revenue growth and profitability.
- Expanding global footprint with an increasing dealer network.
- Well-diversified product portfolio catering to infrastructure needs.
- Positive industry outlook due to government focus on infrastructure development.
- Low debt levels, indicating financial stability.
- Experienced management with a track record of execution.
Risk Factors
- Since the IPO is an offer for sale, the company won’t benefit financially from this issue.
- Any slowdown in the construction or infrastructure sector may impact demand.
- Rising raw material costs could put pressure on margins.
- Competition from domestic and international players.
- Dependence on government policies and regulations in the construction sector.
- Investors should review Ajax Engineering IPO RHP for complete risk factors.
How to Buy Ajax Engineering IPO?
Investors can apply for the IPO through their trading accounts using ASBA (Application Supported by Blocked Amount) via online banking or UPI-based applications on platforms like Zerodha, Upstox, Groww, and other brokerage firms.
Grey Market Premium (GMP)
As of now, the Grey Market Premium (GMP) of this IPO is available in limited websites like Chittorgarh which indicates GMP as ₹ 52 per share, indicating a moderate demand for the stock before listing. Based on limited information, we cannot say the Ajax Engineering IPO Expected Listing Price.
Also Read: Top 5 International Mutual Funds for 2025
Ajax Engineering IPO – Good or Bad?
Ajax Engineering IPO presents a strong investment opportunity due to its market leadership, robust financials, and promising growth prospects. While the higher P/E ratio might seem a concern, the company’s monopoly-like presence in the SLCM market makes it an attractive bet. However, investors should consider risks such as industry cyclicality and margin pressures before investing.
Overall, this IPO seems well-positioned for long-term gains, and medium to long-term investors can consider subscribing to this.
Disclaimer: This article is for informational purposes only and not investment advice. Investors should consult financial experts before making decisions.
Discover more from Myinvestmentideas.com
Subscribe to get the latest posts sent to your email.