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.

Kross IPO Details:

Kross IPO Issue Price & Size

The issue price of Kross is between the price ranges of Rs 228 to Rs. 240. 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

Kross IPO issue will open from September 9 and close on September 1, 2024. Kross IPO will get listed on September 16, 2024.

Kross Financial Statements:

Kross IPO Promoters & Shareholding of the Company

Names of the promoters who hold a 99.26% stake in the company, as mentioned below.

1. Sudhir Rai (Promoter, Chairman and MD)
2. Anita Rai (Promoters and Whole-time Director)
3. Sumeet Rai (Promoters and Whole-time Director)
4. Kunal Rai (Promoters, Whole-time Director and CFO)

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.

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.

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.

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.

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.

Kross IPO Grey Market Premium (GMP)

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 Kross IPO 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.

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