Craftsman Automation IPO : Subscribe or NOT?

The data has been compiled from various sources and might have small difference but overall theme is to subscribe or not — we will focus on that

Craftsman Automation IPO– Almost 35 yr old company involved in manufacturing of auto components mainly for CV

Business — 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 and tractor segement

Offer purpose — Offer for sale (824cr) including fresh issue of 150 cr for repayment of debt

Key domains -Company have three major segments. 1) Powertrain and other automotive products 2) Aluminium products for the automotive segment, and 3) Industrial and engineering products.

Key Clients-Tata Motors, M&M, TVS, Royal Enfield, JCB

Risks

Company has high debt of 890 cr

Continuous capex and upgradation of plant along with stringent quality requirement by customers poses challenge for company

Highly exposed to CV industry

Strength

Company has sustained strong client relationship, many customers are clients for over 10 years

Company keep on upgrading and modernizing its plants regularly

Future

Beginning of upcycle in CV and lot of capex behind should support company earnings

Valuations

Looking at peers and bull market frenzy, company is relatively cheap. In absolute terms valuations are expensive

Should we apply?

People can avoid for long term and wait for right price point to enter

If applying, recommended to sell on getting gains on listing day

One can avoid for investment purposes as of now until one has high risk appetite

Also Read

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UTI AMC IPO crisp Summary — Listed with loss as shared

CAMS IPO crisp summary — Listed with 20% gains as shared

Angel Broking IPO crisp summary –Listed with loss as shared

Happiest Minds IPO crisp summary –Listed with substantial gains as shared

In case you have any questions/ queries, please feel free to reach me through Contact Form

Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.

Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.

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