Chandigarh-based Indo Farm Equipment made a solid debut on the stock market on Tuesday, albeit it was below market expectations. The share price of Indo Farm Equipment listed at ₹258.40 on the BSE, a premium of 20% over the initial public offering (IPO) price of ₹215. On the NSE, the stock kicked-off trading at ₹256, up 19% over the issue price.

Post listing, Indo Farm Equipment shares gained as much as 32.5% to hit a high of ₹284.90 on the BSE, while the market capitalisation climbed to ₹1,355 crore. On the NSE, the stock surged 25% to touch a high of ₹268.75. Meanwhile, the equity benchmarks Sensex and Nifty were trading flat with marginal gains.

Ahead of the listing, shares of Indo Farm Equipment were commanding grey market premium of ₹76 in the unlisted market, indicating listing price at around ₹291, up 35%.

Indo Farm Equipment, engaged in manufacturing tractors, pick & carry cranes, and other harvesting equipment, raised ₹260.15 crore via IPO route, which was a mixture of fresh equity shares worth ₹184.90 crore and offer for sale of ₹75.25 crore by existing sharesholders. The price band of the issue was ₹204-215 per share and the minimum lot size for an application was 69. 

The IPO, which opened for subscription between December 31 and on January 2, garnered an overwhelming response from investors, receiving 227.67 times bids worth ₹41,459 crore, emerging as the second highest subscribed IPO among the mainboard issues launched in 2024. The public issue subscribed 101.79 times in the retail category, 242.4 times in QIB, and record 501.75 times in the NII segment.

In its pre listing view, Mehta Equities said that despite offer been slightly on expensive side, Indo Farm Equipment received overwhelming response from sets of investors especially NII category who bidded for more than 500x to the category allotment.

“We believe the massive demand was on the back of the main reason being that the company is spending ipo proceeds to strengthen its dealer network which can eventually lead to higher tractor sales in future. On the other hand, company is in expansion mode for its pick and carry cranes capacities to meet rising demands followed by strong backward integration business model helping the company to enjoy high EBITDA margin when compared to its peers and assuming bright prospects for growth in agriculture segment as well as cranes segments due to huge infrastructure spending from Govt and Private industries,” said Prashanth Tapse, Senior VP (Research), Mehta Equities.

He recommended conservative allotted investors to book profits and long term investors to “HOLD” for long term. “For non-allotted investors, we advise to accumulate if we get dips post listing due to profit booking attempts.”

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)