Karamtara Engineering Ltd. Files DRHP for Rs 1750 Crore IPO
Karamtara Engineering Ltd. has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise ₹1,750 crore through an initial public offering (IPO). The company seeks to list its equity shares on the National Stock Exchange of India Ltd. and Bombay Stock Exchange Ltd. The company may consider a pre-IPO placement of equity shares, and if completed, the amount raised would be reduced from the fresh issue.
IPO Structure and Promoters
The fresh issue of shares is valued at ₹1,350 crore, while the offer for sale (OFS) is worth ₹400 crore. Tanveer Singh and Rajiv Singh, the company's promoters, will be offloading shares worth ₹200 crore each as part of the OFS. Currently, the promoters hold a 94.8% stake in the company.
Use of Funds
The company plans to use ₹1,050 crore from the fresh issue towards debt repayment and the remaining portion for general corporate purposes.
Company Overview
Karamtara Engineering is a vertically integrated manufacturer specializing in products for the renewable energy and transmission line sectors. The company is a backward integrated manufacturer of transmission lines and renewable energy products. It is considered a one-stop shop for solar structures, offering both fixed-tilt and tracking systems. Karamtara Engineering also provides:
- Lattice structures for transmission lines.
- Fasteners for solar, wind, transmission, and industrial sectors.
- Overhead transmission line hardware fittings and accessories.
- Solar module mounting structures, solar tracker piles and piers, and solar torque tubes
According to the F&S Report, Karamtara Engineering is India's biggest and most prominent manufacturer of solar mounting structures and tracker components in terms of installed capacity during Fiscal 2024 and the six months ending September 30, 2024. The company is also foraying into the wind energy sector by setting up a manufacturing facility to produce tubular towers for wind turbines, which are expected to be operational by the first quarter of fiscal 2026.
Financial Performance
Karamtara Engineering reported a profit of ₹102.65 crore for the financial year 2024, more than double the ₹42.36 crore it earned in the previous fiscal year. The company's revenues also significantly increased, rising to ₹2,425.15 crore in FY2024 from ₹1,600.31 crore in FY2023.
Book Running Lead Managers and Registrar
The book-running lead managers for the issue are JM Financial Ltd., ICICI Securities Ltd., and IIFL Capital Services Ltd. MUFG Intime India Pvt. is the registrar for the issue
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