Kross Limited – About the Company
Established in 2019, Kross Limited is a leading manufacturer and supplier of trailer axle and suspension assembly, as well as a wide range of forged and precision machined high performance safety critical parts for medium and heavy commercial vehicles (M&HCV) and farm equipment segments.
The company operates out of five manufacturing facilities in Jamshedpur, Jharkhand. The company is expanding its capacity and increasing product offerings through the expansion of existing facilities and the addition of further production lines.
Kross IPO Objectives
Kross Limited IPO offer contain both offer for sale and fresh issue.
- The offer for sale consist of Rs. 250 crores and the full among will o to selling shareholders.
- The fresh issue consists of Rs. 250 crores. The amount as mentioned in the DRHP will be used for doing capital expenditure and repayment of loan.
| Particulars | Estimated amount(Rs. million) |
| Funding of capital expenditure requirements of our Company towards purchase of machinery and equipment | 700 |
| Repayment or prepayment, in full or in part, of all or a portion of certain outstanding borrowings availed by our Company, from banks and financial institution | 900 |
| Funding working capital requirements of the Company | 300 |
| General corporate purposes | [●] |
| Net Proceeds | [●] |
Kross IPO Details:
| IPO Open Date | Not Available |
| IPO Close Date | Not Available |
| Basis of Allotment | Not Available |
| Listing Date | Not Available |
| Face Value | Rs 5 per share |
| Price | Not Available |
| Lot Size | Not Available |
| Total Issue Size | Up to [●] Equity Shares |
| Aggregating up to Rs. 5,000 million | |
| Fresh Issue | Up to [●] Equity Shares |
| Aggregating up to Rs. 2,500.00 million | |
| Offer For Sale | Up to [●] Equity Shares |
| Aggregating up to ` 2,500.00 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 less than 35% of the Net Issue |
| NII (HNI) Shares Offered | Not less than 15% of the Net Issue |
Kross IPO Issue Price & Size
The issue price of Kross is between the price ranges of Rs XXX (to be updated) to Rs XXX (to be updated). The investors can bid between these price ranges during the open and close date of Kross IPO. As per the DRHP offer document, Kross IPO will issue a fresh issue of equity shares of up to Rs 250 crore and an offer-for-sale (OFS) of R. 250 croes.
Kross IPO Launch Date
The launch date of the Kross IPO is not yet announced officially by the company. However, the Kross IPO will be open on the date of XXXX (to be updated) and will close on XXXXX (to be updated). All types of investors can bid for the IPO between these dates.
Kross Financial Statements:
| Particulars | For 3 month ended
June 30, 2023 |
FY23 | Fy22 | FY21 |
| Revenue from operations | 1437.09 | 4886.28 | 2974.55 | 1837.69 |
| Other income | 1.65 | 7.29 | 4.26 | 4.36 |
| Total Income | 1438.74 | 4893.57 | 2978.81 | 1842.05 |
| Expenses | ||||
| Cost of raw materials consumed | 885.79 | 2941.66 | 1595.67 | 872.82 |
| Changes in inventories of finished
products and work in progress |
6.4 | -44.57 | 7.19 | 14.5 |
| Employee benefits expense | 67.58 | 265.09 | 201.77 | 161.64 |
| Finance costs | 29.58 | 122.19 | 81.61 | 90.15 |
| Depreciation and amortisation expense | 13.71 | 43.22 | 55.03 | 47.58 |
| Other expense | 325.52 | 1148.88 | 874.44 | 597.02 |
| Total Expenses | 1328.58 | 4476.47 | 2815.71 | 1783.71 |
| Profit for the period/ year | 80.01 | 309.31 | 121.69 | 47.67 |
| Prior to Bonus issue and Share split | ||||
| Basic EPS | 5.92 | 2.87 | 9 | 3.52 |
| Diluted EPS | 5.92 | 2.87 | 9 | 3.52 |
| Particulars | For the 3 months period
ended June 30, 2023 |
FY23 | FY22 | FY21 |
| Revenue from Operations | 1437.09 | 4886.28 | 2974.55 | 1837.69 |
| Growth in revenue from operation | - | 64.27 | 61.86 | N.A |
| Gross Profit | 544.9 | 1989.19 | 1371.69 | 950.37 |
| Gross Margin (%) | 37.92 | 40.71 | 46.11 | 51.72 |
| EBITDA | 151.8 | 575.22 | 295.48 | 191.71 |
| EBITDA Margin (%) | 10.56 | 11.77 | 9.93 | 1043 |
| Profit for the Year/Period | 80.01 | 309.31 | 121.69 | 47.67 |
| PAT Margin | 5.56 | 6.32 | 4.09 | 2.59 |
| Return on Equity (%) | 7.25 | 30.29 | 16.81 | 7.96 |
| Return on Capital Employed (%) | 6.66 | 27.51 | 14.97 | 10.03 |
| Debt/Total Net Worth (in times) | 0.84 | 0.86 | 1.19 | 1.39 |
| Gross Fixed Assets Turnover Ratio (in times) | 0.99 | 3.49 | 2.43 | 1.65 |
Kross IPO Promoters & Shareholding of the Company
Names of the promoters who hold a 99.26% stake in the company, as mentioned below.
- Sudhir Rai (Promoter, Chairman and MD)
- Anita Rai (Promoters and Whole-time Director)
- Sumeet Rai (Promoters and Whole-time Director)
- Kunal Rai (Promoters, Whole-time Director and CFO)
| Name of Shareholder | Pre-Offer Equity Share capital |
| % of total shareholding | |
| Sudhir Rai | 57.68 |
| Anita Rai | 28.1 |
| Sumeet Rai | 7.02 |
| Kunal Rai | 6.46 |
| Total | 99.26 |
Kross Limited Competitive Strengths:
Long standing relationship with large OEM
The company has maintained long-standing relationships with large OEM. While serving both international and national clients over the period of time has encouraged them to enter into new precuts to competent with base product. This has built a wide product portfolio to meet the needs of an even more varied clientele.
| Particulars | 3 month period ended June 30, 2023 | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 |
| % of total revenue from operations | ||||
| Top three customers | 55.52% | 50.50% | 54.49% | 58.85% |
| Top five customers | 71.39% | 68.37% | 68.08% | 78.81% |
In the last three fiscals, the company has served over 200 customers for the M&HCV segment, domestic dealers, and fabricators for their trailer axle and suspension business.
Prominent manufacturers
In 2019, the company transitioned to a systems manufacturer, focusing on trailer axles and suspension assemblies.
As on date, companies manufacturing capacity was 60,000 trailer axle and suspension assemblies per annum.
| Particulars | 3 month period ended June 30, 2023 | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 |
| % of total revenue from operations | ||||
| Trailer axle and suspensions | 43.79% | 33.32% | 22.49% | 12.25% |
The company has a manufacturing capacity of 60,000 trailer axle and suspension assemblies per annum.
Diversified portfolio with integrated manufacturing operations
Kross Limtied is a diversified manufacturer of forging and machined precision components with integrated manufacturing capacity of high precision safety critical components. With their manufacturing capabilities, the company is able to provide comprehensive solutions to customers.
The company operates five manufacturing facilities in Jamshedpur, Jharkhand. Over the years, the company's engineering and product development capabilities have expanded their product offerings. They have side by side invested in forging and machining equipment and developed processes and techniques for producing complex components with closed tolerances.
Kross Limited Risks Factors:
End-user industry risk
The product developed by the company is used as a component in making the final product by the consumer. So company’s products demand is directly linked to the production and sales of M&HCV and farm equipment by our customers.
Referring to table below, company gets majority of revenue by selling parts for M&HCV vehicles.
| 3 month period ended June 30, 2023 | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 | |
| Particulars | % of total revenue from operations | |||
| M&HCV | 85.88 | 82.75 | 75 | 63.28 |
| Farm Equipment | 11.29 | 12.13 | 18.37 | 30.67 |
If we differentiate between Medium and Heavy Commercial Vehicles M&HCV, Trailer axle and suspensions and Truck components contribute almost 40% each in revenue to oversell segment.
| 3 month period ended June 30, 2023 | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 | |
| Particulars | % of total revenue from operations | |||
| Trailer axle and suspensions | 43.79% | 33.32% | 22.49% | 12.25% |
| Tractor components | 11.29% | 12.13% | 18.37% | 30.67% |
| Truck components | 42.09% | 49.43% | 52.51% | 51.03% |
There can be numerous factors that can led to decline in demand for product like industry conditions, economic outlook, agricultural output, evolving regulatory requirements, etc. Negative effect of these scenarios can have impact the business, financial condition, cash flows, and operational results.
Kross Business strategies
Expand existing manufacturing facilities capacities
In the past 3 fiscal years the company has invested on an average 4.5% of their revenue from operations and the company intends to continue their growth strategy. In past, the company has investing for increasing the production capacity, scale operations, onboard new customers, introduce new products, and better serve existing customers.
Due to growth in GDP and rising demand for heavy vehicles for transportation, the manufacturing units have been operating at or over 70% utilisation for the three month period ended June 30, 2023.
With motive of expanding business and take advantage of growing sales, the company intends to use IPO proceeds for funding capital expenditure requirements.
Create manufacturing capabilities in axle beam extrusion and backward integration capabilities into the seamless tube
Expand our geographical reach
Till date the company has been focusing on domestic market and exports contribute less than 1.00% of the company's revenue. The company plans to expand it’s expand geographical footprints by leveraging its diverse product portfolio to improve profitability
Improve our financial profile
The business operates in a capital-intensive sector, meaning that a sizable quantity of working capital is required for running day to day activates like buying raw material, settling bills, etc. To far, the firm has utilized a combination of internal accruals and borrowings to finance its capital requirements.
During FY23, FY22 and FY21, their working capital requirement was Rs. 1,014.47 million, Rs. 836.49 million, and Rs. 752.48 million. The company intends to use Rs. 30 crores from the net Proceeds towards funding working capital requirements.
The company seeks to deleverage its balance sheet by utilizing Rs. 900.00 million from the net proceeds toward repayment and/or prepayment of certain of our existing borrowings.
As can be seen form table below, in less than 1 year the company sees financial liabilities of Rs.799 million.
| As at June 30, 2023 | Contractual maturities of financial liabilities | |||
| Less than 1 year | 1-2 years | 2-3 years | More than 3 years | |
| Borrowings and interest thereon | 799.98 | 128.54 | 86.3 | 207.27 |
| Lease liabilities | 1.74 | 1.82 | 2.92 | - |
| Trade payables | 357.08 | 24.11 | - | - |
| Other financial liabilities | 37.39 | - | - | - |
Kross IPO Grey Market Premium (GMP)
The Grey Market Premium or GMP is the pre-defined price of an unlisted company that has launched the IPO with an issue price and is likely to list on the stock exchanges. The GMP is the premium price over the issue price in IPO, and it is determined by the speculators in the grey market depending on the demand and supply of the shares in the grey market.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated &Reliable
As the issue price of the Kross IPO has not been disclosed or declared by the company, the GMP is also not identifiable in the grey market. However, the GMP is not a reliable factor in deciding the expected listing price of any unlisted company, but it can give an idea of its share price, at that price it is going to trade around in the secondary market.
How to Apply for Kross IPO?
To apply in the Kross IPO or any other company’s IPO or if you are looking to invest in the stock market, you need a trading account and a demat account. You have to open both these accounts with the SEBI and stock exchanges registered brokers to apply for the IPO or buy or sell in the stock market. Right now if you don’t have these accounts, just apply here at Moneysukh, to open both these accounts and apply in the IPO or perform the online trading.
Also Read: Benefits of Investing in the Stock Market: Advantages of Share Market
Having a trading and demat account with Moneysukh, you will get a world-class facility with best trading platform at the best discount brokers in India for trading or investing in equities, commodities and currencies at the lowest brokerage and best pricing in the industry. To apply for the Kross IPO through Moneysukh just follow the steps given below.
Also Read: Equity or Commodity which is better for Trading or more Profitable
Steps to Apply for Kross IPO:
Step 1: When Kross IPO opens, only then you can apply for the bidding.
Step 2: Open trade.moneysukh.com in your browser and log in with your User ID & password.
Step 3: Now you need to navigate to the IPO section and click on the Kross IPO.
Step 4: Further you need to fill in the various details like price, quantity, and so on.
Note: Always make sure always bid at the cutoff price while applying and submitting your application in the IPO.
Step 5: Now make the required payment amount before submitting your IPO application successfully.
How to Check Kross IPO Allotment Status?
The basis of the allotment process in the IPO starts after few days after the last bidding date. Depending on the IPO subscription status, a company organises the allotment procedure. If an IPO is oversubscribed many times, most companies follow the lottery system to organize the allotment process. Hence, the chances of getting the allotment of shares become very low for each individual investor when the entire IPO issue is oversubscribed into multiple folds.
Also Read: How to check IPO allotment status on NSE, BSE through Moneysukh
IPO allotment for retail and IPO in the HNI category or any other category all are done as per the quota decided for the different types of investors. Hence, you need to follow certain tips while investing in IPOs to improve your chances of allotment of shares.
Also Read: How to Increase the Chances of IPO Allotment
However, when an investor doesn't get any shares in the allotment then, the IPO application money will be refunded into the bank account or the fund will be unblocked if you have applied into the IPO through an ASBA UPI-based online payment system.
If you are the lucky one and managed to get the allocation of shares during the allotment the number of shares allocated to you will be transferred into your demat account before the date of listing. You sell the shares to book profits or further keep them in your portfolio with the intention to get long-term gain from an increase in the value of the share.
Also Read: What is Profit Booking in Stock Market: Rules & Best Strategy
