Business Profile of Karamtara Engineering Limited
Karamtara Engineering Limited was incorporated in 1996 and involved in business of manufacturing products for renewable energy and transmission lines. The company serving a one-stop solutions for solar structures (fixed-tilt and trackers), overhead transmission line hardware fittings and fasteners for solar energy & transmission sectors under its diverse product portfolio. The company prioritize on backward integration with in-house galvanizing facilities, the largest in India’s solar energy sector (258,000 MTPA), and rolling mill furnaces, providing time and cost efficiency & competitive advantages in supply chain. In wind energy sector, company setting up a manufacturing unit for wind turbines which expected to begin operation in first quarter of fiscal 2026. The company exports its products over 50 countries including Europe, North America, Asia, Africa and other countries, as of September 30, 2024. The product portfolio of company includes solar mounting products, lattice tower for transmission lines and fasteners for solar, wind & transmission segments.
Objective of Karamtara Engineering IPO
As per the draft red hearing prospects, the IPO issue consists fresh issue and offer for sale. The fresh issue consists of XXXX shares at the face value of ₨ 10.00 each aggregating up to ₹ 13,500.00 millions and OFS consists XXXX shares at face value of ₨ 10.00 each aggregating up to ₨ 4,000.00 millions. There are fresh shares issues and OFS by company and main objective of company is funding prepayment, repayment and/ or payment obligations to our lenders towards borrowings and general corporate expenses.
Details of Karamtara Engineering IPO
| IPO Open Date | N.A. |
| IPO Close Date | N.A. |
| Basis of Allotment | N.A. |
| Listing Date | N.A. |
| Face Value | ₹10.00 per share |
| Price | N.A. |
| Lot Size | N.A. |
| Total Issue Size | Up to XXXX Equity Shares |
| Aggregating up to ₨17,500.00 million | |
| Fresh Issue | Up to XXXX Equity Shares |
| Aggregating up to ₨ 13,500.00 million | |
| Offer For Sale | Up to XXXX Equity Shares |
| Aggregating up to ₨ 4,000.00 million | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not more than 50% of the Net Issue |
| Retail Shares Offered | Not more than 35% of the Net Issue |
| NII (HNI) Shares Offered | Not less than 15% of the Net Issue |
Karamtara Engineering IPO: Issue Price & Size
The issue price of KARAMTARA ENGINEERING LIMITED hasn’t been released yet. Upon releasing the dates, the investors can bid between those price ranges. The company has fresh issue and OFS aggregating up to ₹ 17,500.00 million at the price of ₨XXXX.
Launch Date of Karamtara Engineering IPO
The IPO opening date of KARAMTARA ENGINEERING LIMITED hasn’t been officially announced yet, upon the declaration of dates investor can bid for IPO.
Financial Statements of Karamtara Engineering Limited
| Particulars | Ended Sept 30 , 2024 |
Ended Sept 30 , 2023 |
Mar 31 , 2024 |
Mar 31 , 2023 |
Mar 31 , 2022 |
| Income | |||||
| Revenue from Operations | 14,131.04 | 10,527.33 | 24,251.50 | 16,003.07 | 12,448.09 |
| Other income | 12.03 | 13.14 | 19.66 | 7.67 | 18.67 |
| Total Income | 14,143.07 | 10,540.47 | 24,271.16 | 16,010.74 | 12,466.76 |
| Expenses | |||||
| Cost of material consumed | 9,821.05 | 7,503.26 | 17,437.89 | 11,132.10 | 8,470.83 |
| Changes in inventories of finished goods and work - in - progress | ( 159.01 ) | ( 199.46 ) | ( 208.97 ) | ( 287.67 ) | 248.80 |
| Employee benefit expenses | 697.52 | 522.88 | 1,137.89 | 851.08 | 791.13 |
| Finance cost | 568.93 | 406.45 | 928.52 | 759.12 | 775.98 |
| Depreciation and amortisation expense | 185.93 | 167.37 | 346.05 | 318.69 | 311.48 |
| Other expenses | 2,239.90 | 1,661.32 | 3,255.41 | 2,771.49 | 1,639.28 |
| Total Expenses | 13,354.32 | 10,061.82 | 22,896.79 | 15,544.81 | 12,237.50 |
| Profit before tax ( I - II ) | 788.75 | 478.65 | 1,374.37 | 465.93 | 229.26 |
| Tax Expenses | |||||
| Current Tax | 188.07 | 110.10 | 353.86 | 125.26 | 84.48 |
| Deferred Tax | 10.77 | ( 20.66 ) | ( 5.99 ) | ( 82.93 ) | 18.32 |
| Profit after tax ( I - IV ) | 589.91 | 389.21 | 1,026.50 | 423.60 | 126.46 |
Key financial ratios of Karamtara Engineering Limited
| Key Financial Metrics | Six months 30 September | Fiscal Year | |||
| 2024 | 2023 | 2024 | 2023 | 2022 | |
| Revenue from operations (million) | 14,131.04 | 10,527.33 | 24,251.50 | 16,003.07 | 12,448.09 |
| a. Domestic (million) | 7,442.61 | 3,063.95 | 10,293.18 | 3,499.01 | 4,800.13 |
| b. Exports (million) | 6,688.43 | 7,463.38 | 13,958.32 | 12,504.06 | 7,647.96 |
| Revenue from sale of Renewable Products (million) |
11,787.34 | 8,562.57 | 19,826.44 | 11,057.16 | 7,829.65 |
| EBITDA (million) | 1,531.58 | 1,039.33 | 2,629.28 | 1,536.07 | 1,298.05 |
| EBITDA margin (%) | 10.84 % | 9.87 % | 10.84 % | 9.60 % | 10.43 % |
| Restated profit after tax (million) | 589.91 | 389.21 | 1,026.50 | 423.60 | 126.46 |
| Cash profit (million) | 775.84 | 556.58 | 1,372.55 | 742.29 | 437.94 |
| Net Debt | 4,967.43 | 3,973.06 | 4,631.48 | 2,928.95 | 3,982.70 |
| Net Debt to Equity | 0.84 | 0.81 | 0.84 | 0.65 | 0.97 |
| Net debt to EBITDA | 3.24 | 3.82 | 1.76 | 1.91 | 3.07 |
| Return on equity (%) | 10.33 % | 8.28 % | 20.45 % | 9.85 % | 3.14 % |
| Return on capital employed (%) | 12.01 % | 9.94 % | 24.15 % | 14.55 % | 11.12 % |
| Fixed asset turnover ratio20 * | 2.48 | 1.98 | 4.26 | 3.19 | 2.75 |
| Net Working Capital (days) | 59 | 76 | 67 | 76 | 110 |
| Capacity ( in MTPA ) | 567,000 | 4,35,900 | 4,91,100 | 4,12,200 | 4,24,200 |
| Capacity Utilisation ( % ) | 63.69 | 67.18 | 67.91 | 51.90 | 43.45 |
Promoters & Shareholding Karamtara Engineering IPO
As of date, according to the DRHP filed with SEBI promoters and promoter group have 100.00% shareholding in company.
| Name | Number of Equity Shares | % Equity Shares |
| Promoters | 27,70,57,500 | 94.79 |
| Members of Promoter Group | 1,52,37,740 | 5.21 |
| Total (A+B) | 29,22,95,240 | 100 |
Should You Subscribe To Karamtara Engineering IPO
While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.
Competitive Strengths of Karamtara Engineering IPO
Largest manufacturer in India for solar mounting structures
The company is the largest integrated manufacturer in terms of installed capacity in India for solar mounting structures and tracker components in fiscal 2024 and six months ended September 30, 2024. According to the F&S report, the company is one of the few product manufacturers to operate in-house facilities which is the largest installed capacity in the solar energy sector in India with 258,000 MTPA capacity. The backward integration of products and capabilities to manufacture its steel structures and other product offerings benefits the company.
Diverse product offerings
The company is one stop shop equipped to design, manufacture, and supply various solar structures. In company diverse portfolio includes the solar energy sector and transmission sector. The diverse product range offers the company numerous benefits, particularly in relation to cross-selling advantages. In addition to increased sales, a comprehensive range of products also enhances customer experience, which drives revenue growth and creates a competitive edge in the market.
Extensive global footprint
The capabilities of the company have enabled it to serve various customers in international markets and the company supplied its products to over 50 countries as of September 30, 2024, across Asia, North America, Australia, and Latin America. It is the largest exporter of solar products from India to North America in fiscal 2024, according to the F&S report. The in-house rolling mill furnace and large galvanizing facilities improve its capability to convert raw material into finished goods at high quality.
Strategic manufacturing facilities
The company operates eight manufacturing facilities, out of which seven facilities are located in India and one facility is located in Italy as of September 30, 2024. The facilities are equipped with automated equipment, robotics, and advanced technologies, including Internet of Things (IoT) sensors within manufacturing facilities to enhance the maintenance process, reduce downtime, and increase overall cost & production efficiencies. This strict quality control and backward integration of steel products enhance the company's operational efficiency.
Risk Factors of Karamtara Engineering IPO
Manufacturing concern
The company significantly relies on its manufacturing facilities and any unscheduled, prolonged distribution or slowdown of its manufacturing facilities could have a material adverse effect on their business and financial condition. Further majority of its manufacturing facilities are located in Maharashtra India. The revenue of the company attributable to its facilities in Maharashtra for 98% and 99.18% of total revenue from operations in six months ended September 2024 and fiscal 2024, which exposes the company to geographic risk.
Key client dependency
A significant portion of company revenue is derived from the top 10 customers’ contribution to 53.91% and 63.47% of total revenue in the six months ended September 30, 2024, and fiscal 2024 respectively. There is no assurance that the company will be able to retain the business with its existing key customers in the future. The loss of these customers or loss of revenue from these customers may materially adversely affect its business and financial conditions.
Offshore business risk
The company derives a significant portion of its revenue from operations from exports which exposes the company to risks inherent to operations in foreign jurisdictions. Even though the majority of its revenue is based in India but company is also exposed to risks like exchange rate fluctuations due to the raw materials that it purchases from the international market. Any adverse development in the international market in which the company intends to expand could have a negative effect on businesses, cash flows, and results of operations.
High Indebtedness
The company requires adequate capital to develop new product offerings and manufacturing facilities and expand into new businesses such as wind tubular towers for wind turbines, angular towers, and solar stamping parts. It requires substantial capital for its business operations and to maintain and grow existing infrastructure, purchase equipment, and develop new technologies. The company has incurred certain indebtedness and its inability to obtain further financing could adversely cash flows and results of operations.
Karamtara Engineering IPO Grey Market Premium
Grey market premium is the premium quoted over the IPO issue price. GMP shows that investors are ready to pay above the upper band of the IPO issue price. GMP is determined in the grey market as per the demand and supply of the shares in the primary market. A grey market is that unofficial ecosystem of unlisted companies' stocks that start trading even before the launch of the IPO to the date of its listing.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable
However, GMP is not a reliable factor, as it keeps fluctuating as per the demand and supply of shares in the primary market. There are numerous factors that affect the stock market in India and individual stock prices of different companies that are already listed and trading in the secondary market. However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share
According to various online sources, the Grey Market Premium or GMP of the Karamtara Engineering Limited is trading around Rs XX in the grey market. It means shares are trading at the upper band issue price of Rs XX with a premium in the grey market and may list around the same price.
