Craftsman Automation IPO Review – Should you Subscribe?

Craftsman Automation IPO - Details, Dates, Price Band and ReviewCraftsman Automation IPO Review – Should you Subscribe?

Chennai based Craftsman Automation IPO would open for subscription on 15th March, 2021. Craftsman Automation is India’s leading diversified engineering company with vertically integrated manufacturing capabilities. Company revenues and margins are on declining mode. Should you invest in Craftsman Automation IPO? In this article we would provide Craftsman Automation IPO dates, IPO Price band, market lot, reasons to invest, risk factors, IPO Price valuations and final review whether one should invest or avoid.

Also Read: Anupam Rasayan IPO opens on 12th March – Should you subscribe?

About Craftsman Automation Limited

They are a diversified engineering company with vertically integrated manufacturing capabilities, engaged in three business  segments,  namely  powertrain  and  other  products  for  the  automotive  segment, aluminium  products  for  the  automotive  segment, and industrial and engineering products segment.

They are the largest player involved in the machining of cylinder blocks and cylinder heads in the intermediate, medium and heavy commercial vehicle segment as well as in the construction equipment industry in India.

They are among the top three-four  component  players with  respect  to the machining  of cylinder  block for  the  tractor  segment  in  India. They are present across the entire value chain in the  Automotive-Aluminium Products segment, providing diverse products and solutions.

Craftsman Automation competitive strengths

1) Leading engineering product manufacturer.

2) Strategically located and vertically integrated manufacturing facilities.

3) Strong product design capabilities.

4) Robust financial performance.

Craftsman Automation IPO Dates, Price Band and Issue Details

IPO Opening Date 15-Mar-21
IPO Closing Date 17-Mar-21
Issue Type Book Built Issue IPO
Face Value Rs 5 per equity share
IPO Price band Rs 1,488 to Rs 1,490 per equity share
Market Lot 10 Shares
Min Order Quantity 10 Shares
Listing at BSE and NSE
Issue Size Total Rs 823.7 Crores
i) Fresh issue – 150 Crores
ii) OFS – 673.7 Crores

Note: Craftsman Automation IPO Price Band is confirmed now

Craftsman Automation Limited IPO DRHP

Objects of issue

Here are the objects of the IPO issue.

1) Offer for Sale (OFS) – In this, selling shares, holders would sell their share holding and company would not get any proceeds from this issue.

2) To make repayment/pre-payment of the company’s borrowing fully or partially.

3) To meet general corporate purposes.

Who are the company promoters?

Mr Srinivasan Ravi is the promoter of this company.

Company Financial Performance

Here are the consolidated revenue and profit details in the last 3 years and 6 months.

For the year / Period ending Total Revenues (Rs in Millions) Profits after tax
(Rs in Millions)
Profit %
Mar-2018 15,228.6 315.3 2.1%
Mar-2019 18,316.4 973.6 5.3%
Mar-2020 15,010.5 410.7 2.7%
6 Months ending Sep-20 5,365.2 69.6 1.3%

Its EPS for FY2020 is Rs 20.4 and last 3 years average EPS is Rs 28.95.

Why to invest in this IPO?

Here are a few reasons to invest.

Craftsman Automation is a diversified engineering company in India with vertically integrated manufacturing capabilities.

Risk Factors of investing in this IPO

1) Company revenues are on declining mode in the last 3.5 years

2) Company profits have fallen in the last 3 years and 6 months

3) The continuing outbreak of covid-19 is uncertain and can impact company business in the future too

4) There is a significant decline in automobile sales prior to Covid-19 and post covid-19 lockdowns, hence one cannot say when it would recover completely

5) A substantial portion of the company assets are hypothecated / mortgaged in favor of lenders as security of company borrowings. If the company fails to service its debt obligations, its lenders may enforce the security which can impact company business

6) Its group companies have incurred losses in the last 3 years

7) For complete internal and external risk factors, you can refer the RHP of the company

Craftsman Automation IPO Dates / Time Table / IPO Schedule

Offer Open 15-Mar-21
Offer close 17-Mar-21
Finalization of Allotment 22-Mar-21
Initiation of Refunds 23-Mar-21
Credit to Demat Account 24-Mar-21
IPO Shares Listing Date 25-Mar-21

How to apply this IPO?

You can login to your demat account, visit IPO section and click on the IPO link of Craftsman Automation Limited. You can then enter minimum lot quantity and price band and then submit.

IPO Price Valuations

Craftsman Automation IPO Price band is Rs 1,488 to Rs 1,490.

1) On the upper price band of Rs 1,490 and EPS of Rs 20.4 for FY20, the P/E ratio works out to be 73x.

2) For the last 3 years average EPS of Rs 28.95, the P/E ratio is 51x.

3) If we annualize its 6 months ending Sep-20 EPS for FY21, the P/E works out to be 217x.

4) Means, the company asking price of Rs 1,485 of the upper price band in the P/E range of 51x to 217x.

5) There are listed peers like Ramkrishna Forgings trading at P/E 157x (Highest) and Mahindra CIE Automative at P/E 17x (Lowest) and the industry average is 60.7x. Hence Craftsman Automation share price of Rs 1,490 is overpriced.

Craftsman Automation IPO GMP

Grey Market Price (GMP) of this IPO would be updated soon.

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Craftsman Automation IPO Review – Should you invest?

Craftsman Automation is a diversified engineering company in India with vertically integrated manufacturing capabilities.

Company revenues and margins are on declining mode.

Craftsman Automation IPO price is over priced.

I would recommend investors to avoid this IPO considering all these negative factors.

If you like our IPO analysis, please share it with your friends through email, on Facebook or on Twitter.

Suresh KP


  1. Thanks suresh.

    in the recent IPO releases most of them are not reasonably priced and trend is very aggressive or it is ended with listing gains. Can you please share your view point on the recent trends.

    1. There is no trend. It is simple that investors are not worried about fundamentals any more in this bull run. This perception might change in later, but we can’t say

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