Ajax Engineering Set to Launch ₹1,269.35 Crore IPO on February 10
Market Leader in Self-Loading Concrete Mixers Eyes Strong Investor Interest with Upcoming IPO
- Company to Offer Shares in ₹599-629 Price Band; Listing Expected on BSE & NSE
- Strong Financial Growth and 75% Market Share Position Ajax as a Promising Investment Opportunity
BILKULONLINE
Ahmedabad, Feb 6: Ajax Engineering Ltd., India’s leading manufacturer of self-loading concrete mixers (SLCM), is set to launch its initial public offering (IPO) on February 10, aiming to raise ₹1,269.35 crore through a pure offer for sale (OFS). The company has set a price band of ₹599-629 per share, with a lot size of 23 shares. The IPO will close on February 12, and the shares will be listed on the BSE and NSE.
Shubhabrata Saha, MD & CEO, Tuhin Basu CFO with Shivani Chhapgar of SBI Capital Market Ltd were present in Ahmedabad to announce the details of the Ajax Engineering IPO.
Details were as below:
Industry Leader in SLCM Market
Ajax Engineering dominates the Indian SLCM market with over 75% market share. The company boasts a portfolio of 141 concrete equipment variants catering to the concrete application value chain. Over the past decade, it has sold more than 29,800 concrete machines in India, with its SLCMs accounting for 14% of all concrete produced in the country in FY24.
The company serves a diversified customer base, including individual contractors, small and mid-sized contracting firms, rental companies, large construction firms, and government agencies. Its products are widely deployed in infrastructure projects such as roads, railway lines, and irrigation systems.
IPO Details and Utilization of Proceeds
The IPO comprises 2,01,80,446 equity shares, amounting to 17.64% of the post-IPO paid-up capital. Since it is a secondary offering, all proceeds will go to selling shareholders, and the company will not receive any funds from the issue.
Ajax Engineering has reserved 78,947 shares for eligible employees, offering a discount of ₹59 per share. Of the remaining shares, 50% are allocated to qualified institutional buyers (QIBs), 15% to retail investors, and the rest to non-institutional investors. The book-running lead managers for the IPO include ICICI Securities, Citigroup Global Markets India, JM Financial, Nuvama Wealth Management, and SBI Capital Markets. MUFG Intime India Pvt. Ltd. is the registrar.
Financial Performance and Valuation
Ajax Engineering has demonstrated strong financial growth, with revenue rising from ₹771.85 crore in FY22 to ₹1,780.07 crore in FY24. Its net profit increased from ₹66.21 crore in FY22 to ₹225.15 crore in FY24. The company reported ₹101.02 crore in net profit on ₹794.16 crore in revenue for the first half of FY25, with expectations of stronger performance in the second half, which typically contributes over 60% of annual revenue.
The IPO is priced at a P/E ratio of 31.96 based on FY24 earnings and 35.61 based on projected FY25 earnings, which is competitive compared to its industry peers, whose average P/E stands above 40%. The company’s return on net worth (RoNW) averaged 15.77% over the last three years, with a post-IPO P/BV of 7.23 based on its net asset value of ₹87.04 per share as of September 30, 2024.
Market Risks and Challenges
While Ajax Engineering enjoys a dominant position in the SLCM market, it faces key risks, including heavy reliance on SLCM sales (85.13% of FY24 revenue) and potential disruptions at its Obadenahalli facility, which handles 99.06% of its assembly operations. Additionally, the company’s business is seasonal, with sales peaking in the second half of the financial year.
Another concern is the company’s leased manufacturing facilities, as the lease agreements for two key properties have expired, and ownership applications are still pending.
Competitive Landscape
Ajax Engineering competes with both domestic and international players in the construction equipment segment. Its competitors include Aquarius Engineers, Schwing Stetter (India), Putzmeister India, KYB-Conmat, and Fiori Concrete Machines India. Listed peers in the industrial equipment sector include Action Construction Equipment, Bharat Earth Movers, and Escorts Kubota.
Investor Outlook
With a strong market position, consistent financial growth, and robust demand for SLCMs in India’s infrastructure development, Ajax Engineering’s IPO is expected to attract significant investor interest. The issue appears reasonably priced compared to industry peers, making it a viable investment for medium to long-term investors.
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