Ajax Engineering IPO: issue dates, price, and lot size

Ajax Engineering Limited, a concrete equipment manufacturer, is set to make its market debut through an initial public offering (IPO) valued at ₹1,269.35 crores. Investors can participate in this exciting opportunity from February 10 to February 12, 2025, which is an offer for sale of 2.02 crore shares.

The IPO presents an attractive entry point for investors, with a carefully structured price band of ₹599 to ₹629 per share and a convenient lot size of 23 shares. For retail investors, this translates to a minimum investment of ₹14,467, offering an accessible gateway to participate in the company's growth potential. The share allotment is expected to be completed on February 13, 2025, with anticipated listing on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on February 17, 2025. This is your opportunity to be part of a concrete equipment manufacturer poised for market expansion and potential future growth.

Ajax Engineering IPO details

Ajax Engineering Limited IPO is a fundraise worth ₹1,269.35 crores comprising an offer for sale of 2.02 crore shares. The IPO will be available for subscription from February 10, 2025, to February 12, 2025, providing an opportunity for investors looking to gain a stake in the construction equipment sector.

Ajax Engineering IPO timeline

The Ajax Engineering Limited IPO opens for subscription on February 10, 2025, and closes on February 12, 2025, with allotment slated for February 13, 2024.

Ajax Engineering IPO review

Ajax Engineering Limited, established in 1992, is a prominent manufacturer of concrete equipment with a comprehensive product portfolio including self-loading concrete mixers, batching plants, transit mixers, boom pumps, concrete pumps, self-propelled boom pumps, slipform pavers, and 3D concrete printers. The company has demonstrated significant market presence by developing 141 concrete equipment variants and selling over 29,800 units in India in the past decade. Their operations are anchored by four specialized manufacturing facilities in Karnataka, supported by a strong design and engineering team of 79 full-time employees, representing about 16% of their total workforce.

The company has built an extensive distribution network comprising 51 dealerships across 23 Indian states, providing 114 touchpoints including 51 headquarters and 63 branches, with 34 locations doubling as service centers. Their international reach extends to South and Southeast Asia, the Middle East, and Africa through 25 dealers and distributors. Ajax Engineering's customer base exceeds 15,700 clients, and they maintain a dedicated service team of 85 employees who provide support through their dealer network.

Ajax Engineering Limited's IPO proceeds will be given to the selling shareholders. The company will not receive any of the funds.

Ajax Engineering IPO financials

The Ajax Engineering Limited IPO showcases a healthy market capitalization of ₹7,196.19 crores. As on March 31, 2024, the key performance indicators reflect the company's financial health, with a Return on Equity (RoE) of 24.53%, Return on Capital Employed (RoCE) of 32.82%, and Debt-to-Equity ratio of 0.01. 

The Return on Net Worth (RoNW) stands at 19.3%, while the Price-to-Book Value (P/BV) is seen at 7.84. The PAT Margin is 12.65. A comparison of earnings per share (EPS) reveals a pre-IPO EPS of ₹19.68 while it is ₹17.66 post-IPO. Similarly, the pre-IPO price-to-earnings ratio is 31.96 and 35.62 post-IPO.

Amount in ₹ crores

Ajax Engineering IPO strengths

Ajax Engineering's market leadership is one of its key strengths, as it commands a 75% market share in India's self-loading concrete mixer (SLCM) segment, positioning it as a dominant player. This leadership, coupled with a diverse product portfolio of over 110 variants across the concrete equipment value chain, allows the company to cater to a wide range of customer needs, including contractors, construction firms, and government agencies. The company also excels in innovation, having introduced groundbreaking technologies such as slip-form pavers and self-propelled boom pumps. With a strong in-house R&D team and patented innovations, Ajax continues to push the boundaries of concrete technology and skill development.

Another significant strength lies in Ajax Engineering's operational efficiency and robust supply chain. The company boasts a technology-driven manufacturing process and advanced automation, ensuring high-quality production while maintaining over 90% material localization. Furthermore, with four lean manufacturing facilities in Karnataka and a new ₹87.2 crore plant under construction, Ajax is well-equipped to meet growing demand. The company’s expansive dealer network of 51 exclusive dealerships across India, along with 25 international distributors, ensures a broad market reach, making Ajax a recognized brand both locally and globally. Additionally, the company’s strong financial health, demonstrated by impressive revenue growth and an asset-light model with minimal debt, supports its long-term growth prospects.

Ajax Engineering IPO weaknesses

Despite its leadership position, Ajax Engineering is heavily reliant on the self-loading concrete mixer (SLCM) segment, which accounts for over 85% of its revenue. Any decline in demand for SLCMs or concrete equipment in India could significantly impact the company’s financial performance. The company also faces seasonality risks, as sales fluctuate across quarters, potentially affecting profitability during slower periods. Moreover, Ajax is vulnerable to fluctuations in material prices and disruptions in supply chains, as delays or shortages in material availability can lead to increased costs and production delays.

Additionally, Ajax's manufacturing operations are concentrated in Karnataka, exposing the company to regional risks such as natural disasters, infrastructure disruptions, or regulatory changes that could adversely affect its operations. The company's reliance on a single facility for 99% of its SLCM assembly heightens the risk of operational disruptions, including labor disputes or technical failures. Furthermore, Ajax faces significant competition from both domestic and international manufacturers, which could pressure its pricing strategy and affect market share. The cyclical nature of the concrete equipment industry and its dependency on government infrastructure spending also pose risks to sustained growth, as economic downturns or changes in government policies may impact demand.

Should you invest in the Ajax Engineering IPO?

The Ajax Engineering Limited IPO presents an exciting chance for investors to enter the concrete equipment sector at an early public stage. While the potential for early investment is appealing, making sound financial decisions requires a careful assessment of the company's fundamentals, market position, and growth prospects. Interested investors should conduct thorough research to ensure this opportunity aligns with their financial goals and risk tolerance, turning a promising investment into a strategic financial choice.

FAQs

What is the Ajax Engineering IPO?

The Ajax Engineering Limited IPO is a main-board offering consisting entirely of an offer for sale of 2.02 crore shares with a face value of ₹1 per share, aiming to raise a total of ₹1,269.35 crores. The share price is set between ₹599 and ₹629, with a minimum order quantity of 23 shares. This IPO will be open for subscription from February 10, 2025, to February 12, 2025. Link Intime India Private Limited is the registrar while ICICI Securities Limited, Citigroup Global Markets India Private Limited, Jm Financial Limited, Nuvama Wealth Management Limited, SBI Capital Markets Limited are the book-running lead managers.

When will the Ajax Engineering IPO open?

The Ajax Engineering Limited IPO will open for subscription on February 10, 2025, and will close on February 12, 2025.

When is the Ajax Engineering IPO listing date?

The tentative listing date for the Ajax Engineering Limited IPO is Monday, February 17, 2025.