Ajax Engineering IPO opens today; GMP up 8%; should you park your money?

Ajax Engineering IPO: Check price band, lot size, GMP, allotment date, listing date, brokerages' reviews, and other key details

Ajax Engineering IPO: The initial public offering (IPO) of concrete equipment manufacturer Ajax Engineering opens for public subscription today, February 10, 2025. At the upper end of the price band, the company seeks to raise Rs 1,269 crore from the offering. Ajax Engineering has already raised Rs 379.32 crore from anchor investors, with the bidding concluded on February 7, 2025.

 

Ajax Engineering has also garnered favorable reviews from brokerages, including KR Choksey, Reliance Securities, and BP Equities, for its public offering. However, before we delve into the brokerage reports, here are the key details of the Ajax Engineering IPO: 

Ajax Engineering IPO size

 

The public offering comprises an entirely offer for sale (OFS), with promoters and investors divesting up to 20.2 million equity shares of the company. According to the Red Herring Prospectus filed by the company, Krishnaswamy Vijay, Kalyani Vijay, Jacob Jiten John, Jacob Hansen Family Trust, and Susie John are participating in the OFS. From the investor group, Kedaara Capital Fund II LLP will also take part in the OFS.

 

Ajax Engineering price band, lot size

Ajax Engineering IPO is available with a price band of Rs 599-629 per share, and a lot size of 23 shares. Accordingly, investors can bid for a minimum of 23 shares and in multiples thereof.

 

Retail investors need a minimum of Rs 14,467 to bid for one lot, comprising 23 shares. For a maximum bid within the Rs 2,00,000 limit, retail investors can apply for up to 13 lots, or 299 shares.

 

Ajax Engineering IPO grey market premium (GMP)

Shares of Ajax Engineering were commanding a decent premium in the grey market on Monday, February 10, 2025. Sources tracking unofficial market activities revealed that the company's shares were trading at Rs 681 apiece in the grey market, reflecting a premium of Rs 52 or 8.27 per cent over the upper price band of Rs 629.

 

Ajax Engineering IPO allotment, listing date

The public subscription window for the IPO is slated to close tentatively on Wednesday, February 12, 2025. The basis of allotment of Ajax Engineering IPO shares is expected to be finalised on Thursday, February 13, 2025, with shares credited to investors' demat accounts by Friday, February 14, 2025.

 

Ajax Engineering shares are likely to list on BSE and NSE on Thursday, February 19, 2025.

 

Ajax Engineering IPO objective

Ajax Engineering, as outlined in the RHP, will not receive any proceeds from the Offer. "Each of the Selling Shareholders will be entitled to their respective proportion of proceeds from the Offer for Sale, after deducting their portion of the Offer-related expenses and the relevant taxes thereon," said the company in its RHP.

 

Ajax Engineering IPO registrar, lead managers

Link Intime India serves as the registrar for the issue. The book-running lead managers for the Ajax Engineering IPO include ICICI Securities, Citigroup Global Markets India, JM Financial, Nuvama Wealth Management, and SBI Capital Markets.

 

Should you subscribe to Ajax Engineering IPO?

 

KR Choksey - Subscribe

Brokerage firm KR Choksey, in its research report, has assigned a Subscribe rating to the public offering. According to the brokerage, AEL is reasonably priced compared to its industry peers, backed by solid financial performance with a Revenue/PAT CAGR of 51 per cent/84 per cent from FY22 to FY24.

 

"With its dominant market share, growth trajectory, and favorable industry outlook, the company presents a compelling investment opportunity. Hence, we assign a 'Subscribe' rating," said the brokerage in its research note.

 

Reliance Securities - Subscribe

Analysts at Reliance Securities have also recommended that investors subscribe to the Ajax Engineering IPO. Ajax Engineering (AEL), analysts said, has a first-mover advantage with the introduction of SLCMs in India, driven by the high quality and reliability of its products and strong after-sales service. "AEL has strengthened its capabilities and increased its market share of non-SLCM products, while also expanding its presence in overseas markets through exports and exploring opportunities for inorganic growth. With strong financials focusing on capital efficiency and healthy return ratios, the company is supported by an experienced management team and qualified personnel."

 

Analysts believe AEL will continue to maintain its leadership in the large and growing SLCM market, as well as in the concrete equipment and application sectors, completing the value chain and delivering to a diversified customer base.

 

BP Equities - Subscribe

Brokerage firm BP Equities has also assigned a Subscribe rating to the Ajax Engineering IPO. According to the brokerage, the concrete equipment market in India, particularly for SLCMs, is experiencing significant growth driven by several factors, including increasing cement consumption and rising public and private capital expenditure in infrastructure, irrigation, housing, and renewable power projects, leading to higher demand for construction materials and equipment. Ajax Engineering, the brokerage said, has established a robust dealer-led distribution and service model, comprising 51 dealers across 23 states, and serves a diverse base of end customers across specialized sectors such as transportation infrastructure, irrigation, and large-scale infrastructure projects.

 

On the financial front, BP Equities stated, "The company has delivered strong performance, with revenue growing at a CAGR of 51 per cent from FY22 to FY24. During the same period, its Ebitda and PAT grew at an impressive CAGR of 74.5 per cent and 84.4 per cent, respectively."

 

"The issue is priced at a P/E ratio of 32.1x at the upper price band based on FY24 earnings, which is comparatively lower than its industry peers. Given the company’s strong financial performance, favorable industry growth drivers, and attractive valuation, we recommend a 'Subscribe' rating for this issue," said the brokerage.

 

About Ajax Engineering

Ajax Engineering (AEL) is a concrete equipment manufacturer with a comprehensive range of concrete equipment, services, and solutions across the concrete application value chain. The company has developed a comprehensive product portfolio that includes equipment such as self-loading concrete mixers, batching plants for the production of concrete, transit mixers for the transportation of concrete, boom pumps, concrete pumps, self-propelled boom pumps for the placement of concrete, slip-form pavers for the paving of concrete, and 3D concrete printers for depositing concrete.