Diversified engineering company is looking to raise ~₹824 crores through capital markets. | Company caters Automobile, Alumunium and industrial engineering segments and own and operate 12 strategically located manufacturing facilities across seven cities in India
Craftsman Automation Ltd. (Craftsman), Coimbatore based diversified engineering company with vertically integrated manufacturing capabilities, engaged in three business segments, namely 1) powertrain and other products for the automotive segment 2) aluminium products for
the automotive segment and 3) industrial and engineering products segment.
Company is largest player involved in the machining of cylinder blocks and cylinder heads in the intermediate, medium and heavy commercial vehicles segment as well as in the construction equipment industry in India. Company is among the top three-four component players with respect to machining of cylinder block for the tractor segment in India. (Source: CRISIL Report). It is present across the entire value chain in the Automotive-Aluminium Products segment, providing diverse products and solutions.
Company is largest player involved in the machining of cylinder blocks and cylinder heads in the intermediate, medium and heavy commercial vehicles segment as well as in the construction equipment industry in India. Company is among the top three-four component players with respect to machining of cylinder block for the tractor segment in India. (Source: CRISIL Report). It is present across the entire value chain in the Automotive-Aluminium Products segment, providing diverse products and solutions.
| IPO Opens | IPO Closes | Price Band (₹/Sh) | Listing Date |
|---|---|---|---|
| 15-Mar-2021 | 17-Mar-2021 | 1,488 to 1,490 | 25-Mar-2021 |
Promoters of Craftsman Automation is Mr Srinivasan Ravi.
Company own and operate 12 strategically located manufacturing facilities across seven cities in India with a total built up area of over 1.5 million sq. ft. Manufacturing facilities are located at Coimbatore (Tamil Nadu), Pune (Maharashtra), Bengaluru (Karnataka), Faridabad (Haryana), Sriperumbudur (Tamil Nadu), Jamshedpur (West Bengal) and Pithampur (Madhya Pradesh)
Key Customers
1) Automotive – Powertrain and Others segment: key customers include Daimler India, Tata Motors, Tata Cummins, Mahindra & Mahindra, Simpson & Co. Limited, TAFE Motors and Tractors, Escorts, Ashok Leyland, Perkins, Mitsubishi Heavy Industries, John Deere and JCB India.
2) Automotive – Aluminium Products segment: key customers include Daimler India, TVS Motors, Royal Enfield, Perkins and Mahindra & Mahindra.
3) Industrial and engineering segment: include Siemens and Mitsubishi Heavy Industries.
Through this IPO, Craftsman is looking to raise ₹824 Crores. The Net Proceeds are proposed to be used in 1) Repayment/pre-payment, in full or part, of certain borrowings; 2) General corporate purposes.
Promoter, Chairman and Managing Director, Mr. Srinivasan Ravi, is a mechanical engineer and a first-generation entrepreneur with over 34 years of relevant industry experience. Company have received funding from global investors including International Finance Corporation (“IFC”) in 2010 and 2012, and Standard Chartered Private Equity (Mauritius) II Limited (“SCPE”) in 2012 (which transferred its stake to its Affiliate, Marina III Singapore Pte Limited (“Marina”) in 2017). IFC and Marina presently have 14.06% and 15.50% shareholding, respectively, in the Company.
Financials
Total revenue was ₹ 5,337.18 million, ₹ 14,924.65 million, ₹ 18,180.07 million and ₹ 15,115.31 million in 6MFY20 and FY20, FY19 and FY18, respectively.
Net profit was ₹ 69.66 million, ₹ 410.73 million, ₹ 973.67 million and ₹ 315.34 million in 6MFY20 and FY20, FY19 and FY18, respectively.
EBITDA was ₹ 1,487.92 million, ₹ 4,065.51 million, ₹ 4,566.80 million and ₹ 3,051.81 million in 6MFY20 and FY20, FY19 and FY18,
EBITDA increased at a CAGR of 15.42%, from FY18-20.
EBITDA Margin was 27.88%, 27.24%, 25.12% and 20.19%, respectively, grew at a CAGR of 16.15%, in FY18-20.
The share of revenue from Automotive – Powertrain and Others, Automotive – Aluminium Products & Industrial and Engineering segments at 48.17%, 19.70% and 32.12% in 9MFY20 and 47.52%, 17.27% and 35.21% in FY20, 55.47%, 16.95% and 27.58% in FY19, and 57.62%, 15.57% and 26.82% in FY18.
Financials
Total revenue was ₹ 5,337.18 million, ₹ 14,924.65 million, ₹ 18,180.07 million and ₹ 15,115.31 million in 6MFY20 and FY20, FY19 and FY18, respectively.
Net profit was ₹ 69.66 million, ₹ 410.73 million, ₹ 973.67 million and ₹ 315.34 million in 6MFY20 and FY20, FY19 and FY18, respectively.
EBITDA was ₹ 1,487.92 million, ₹ 4,065.51 million, ₹ 4,566.80 million and ₹ 3,051.81 million in 6MFY20 and FY20, FY19 and FY18,
EBITDA increased at a CAGR of 15.42%, from FY18-20.
EBITDA Margin was 27.88%, 27.24%, 25.12% and 20.19%, respectively, grew at a CAGR of 16.15%, in FY18-20.
The share of revenue from Automotive – Powertrain and Others, Automotive – Aluminium Products & Industrial and Engineering segments at 48.17%, 19.70% and 32.12% in 9MFY20 and 47.52%, 17.27% and 35.21% in FY20, 55.47%, 16.95% and 27.58% in FY19, and 57.62%, 15.57% and 26.82% in FY18.
About Industry
The Indian auto components industry clocked a CAGR of 6% in production over Fiscals 2015 to 2020, led by growth in replacement and exports demand. Domestic demand is forecast to log a CAGR of 6% to 8% to approximately ₹ 4,225 billion, driven by demand from OEMs at 7% to 9%, whereas exports are set to grow at 3% to 5% over Fiscals 2020 to 2024 to reach approximately ₹ 2,772 billion on the back of healthy growth in the OEM segment on a low base of Fiscals 2020 and 2021 due to BS-VI norms and the COVID-19 pandemic, respectively. In the long term, CRISIL Research expects the domestic consumption to grow at a pace of 5 to 7% CAGR between Fiscals 2020-2024.
Key Pointers
- Diversified engineering company with a focus on providing comprehensive solutions and manufacturing high quality, intricate and critical products, components and parts.
- Strong in-house process and product design capabilities with the ability to interchange capacity and product mix.
- Long term and well established relationships with marquee domestic and global OEMs.
- Extensive manufacturing footprint, with strategically located manufacturing facilities
- Experienced management team supported by motivated and skilled work force
- Robust financial performance in challenging business environment.
- Leverage vertically integrated manufacturing and engineering capabilities, to tap the growing opportunities for aluminium usage in the Automotive – Aluminium Products and Industrial and Engineering segments.
- Growing opportunities in storage solutions and material handling.
Craftsman Automation IPO Snapshot
| Issue Open | 15-Mar-2021 |
| Issue Close | 17-Mar-2021 |
| Face Value | ₹ 5/- |
| Price Band | ₹ 1,488 to ₹ 1,490 (Including premium of ₹ 1,483 to ₹ 1,485 per share) |
| Discount | Nil |
| Bid Lot | 10 shares and in mutiples |
| Listing on | BSE and NSE |
| Mode of Payment | UPI / ASBA (Mandatory); Applications using third party UPI/ASBA Bank accounts are liable to rejected |
Craftsman Automation Issue & Subscribed Details
| Particulars | Issued | Subscribed |
|---|---|---|
| Issue Size | ₹ 824 Crores (Upper Band) | ₹ - Crores |
| QIB Portion | ~50% | 5.2 times |
| NII Portion (Application for lot size of 15 & above) | ~15% | 2.8 times |
| Retail Portion (Applications for lot size between 1 & upto 15) | ~35% | 3.4 times |
| Employees Portion | NA | NA |
| Total | 100% | 3.8 times |
Craftsman Automation IPO Indicative Dates
| Issue Open | 15-Mar-2021 |
| Issue Close | 17-Mar-2021 |
| Anchor Investor Bidding | One working day prior to Issue opening date of 15-Mar-2021 (around 12-Mar-2021) |
| Announcement of Allotment | 22-Mar-2021 |
| Initiation of Refunds | 23-Mar-2021 |
| Credit of Shares | 24-Mar-2021 |
| Listing (Commencement of trading on Stock Exchanges) | 25-Mar-2021 |
Lead Managers of Craftsman Automation IPO
List of Book Running and Lead/Co-Lead Manager/s
| Axis Capital Limited |
| IIFL Securities Limited |
Registrar of Craftsman Automation IPO
| Link Intime (India) Private Limited |
Valuation
Company is looking at the following valuation
| Issue Size | ₹ TBA Crores (Upper Band |
| Pre-Issue Promoter's Holding | 52.83% |
| Post Issue Promoter's Holding | TBA% |
| Pre-Issue Shares | ₹ 10.06 Crores |
| Post Issue Shares | TBA Crores |
| Post Issue Market Cap (based on Price band) | ₹ TBA to ₹ TBA Crores |
Check Allotment Status of Craftsman Automation IPO
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Source: DRHP, RHP, Company, Company Website | Logo/Images published in the article may be copyright of respective companies.
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