IPO listed on 16 Sep'24
Kross Ltd
Minimum Investment
₹ 14,880 / 62 shares
Grey market premium
₹ 48 (20% premium)
Issue price
₹ 240
Listing price
₹ 240
Listing day %
8%
Listing on
Sep 16, 2024
Our Verdict:
Neutral
- Kross Ltd has exhibited significant growth over the last three years, driven by low customer acquisition costs, backward integration capabilities, and effective management of operational costs.
- The IPO is priced at a P/E ratio of 29x based on FY24 earnings, which is higher compared to other listed competitors in India with better financial metrics than Kross.
- Given the firm’s solid financial performance and potential for growth, it would be prudent for long-term investors to wait for a more favourable entry point post listing.
- Nevertheless, with a 20% grey market premium and the current euphoria around recent IPOs, those willing to take on more risk might consider subscribing to the IPO for potential listing gains.
About the company
Founded in
9 May'91
Managing director
Sudhir Rai
- Kross Ltd is a leading manufacturer and supplier of a diverse array of forged and machined components for commercial vehicles and tractors. With more than 30 years in the business, they are among the fastest-expanding entities in the organized trailer axle and suspension market.
- Operating out of five manufacturing facilities located in Jamshedpur, the firm maintains longstanding relationships with key domestic and international clients, including Ashok Leyland, Tata International, DLT Pvt Ltd, and Leax Falun AB (Sweden).
STRENGTHS
- Exceptional Growth Trajectory: Kross has demonstrated substantial financial growth, with its operational revenue and net profit achieving compounded annual growth rates (CAGRs) of 44% and 92%, respectively, from FY22 to FY24.
- Solid Return Metrics: The firm boasts outstanding return ratios, significantly outperforming its industry peers, with a Return on Equity (RoE) of 31% and a Return on Capital Employed (RoCE) of 28% for FY24.
- Improving Margins: Kross has seen a steady improvement in its EBITDA margin, which rose from 9.93% in FY22 to 13.02% in FY24. Similarly, the Net Profit margin has increased from 4.09% to 7.22% during the same timeframe.
RISK FACTORS
- Customer Concentration: A considerable portion of the firm's revenues (over 66% in each of the past three fiscal years) is derived from its top five customers. Any loss of a major customer or a decline in demand from these key customers could negatively impact the company's business and financial health.
- Valuation Concerns: The IPO is priced at a P/E ratio of 29x, a premium compared to other publicly listed companies in India that have better financials than Kross.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 500 crore
Fresh Issue
₹ 250 crore
OFS
₹ 250 crore
Price range
₹ 228 - 240
Lot size
62 shares
Issue Objective
Kross plans to allocate the net proceeds from the fresh issue for the following purposes:
- Capital investments in purchasing machinery and equipment;
- Partial or complete repayment or prepayment of certain outstanding loans;
- Financing its working capital needs; and
- General corporate purposes.
Dates
Bidding open
9 Sep'24
Bidding close
11 Sep'24
Allotment date
12 Sep'24
Refund date
13 Sep'24
Listing
16 Sep'24
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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