Fri Dec 20 14:23:00 UTC 2024: ## Carraro India IPO Opens Weakly, Receives Only 9% Subscription on Day One

**MUMBAI, Dec 22, 2024** – Carraro India Ltd.’s Rs 1,250-crore initial public offering (IPO) got off to a sluggish start on Friday, attracting only 9% subscription on its first day. The lackluster response is particularly notable due to the complete absence of demand from qualified institutional buyers (QIBs). Non-institutional investors contributed 6% of the subscriptions.

The IPO, which offers a pure sale of shares, is open until December 24th. The price band is set between Rs 668 and Rs 704 per share. Retail investors require a minimum investment of Rs 14,784 (21 shares at the upper price band), while small non-institutional investors need to invest at least Rs 2,06,976 (294 shares).

Adding to the subdued investor sentiment, the grey market premium (GMP) for Carraro India stands at zero, indicating that the estimated listing price mirrors the issue price and suggesting no immediate potential for gains. The allotment of shares is anticipated on December 26th, with a tentative listing date on the BSE and NSE set for December 30th.

Carraro India is a technology-driven supplier of engineering products and solutions to original equipment manufacturers (OEMs) in the agricultural tractor and construction vehicle sectors. While the company reported a 29.4% increase in profit to Rs 60.6 crore in FY24, and revenue growth of 4.4% to Rs 1,770.5 crore, concerns exist regarding its reliance on a small number of key customers – over 70% of its revenue in FY24 stemmed from its top five clients. Further, its dependence on its parent company, Carraro S.p.A., for various operational aspects raises potential risks.

Analysts point to the company’s high Price-to-Earnings (P/E) ratio in comparison to its listed peers as a possible factor influencing the weak subscription. Investors are advised to exercise caution and conduct thorough due diligence before investing in IPOs. This includes consulting with financial advisors and carefully reviewing the red herring prospectus.

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