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
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