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IPO update: Kross Limited files DRHP; aims to raise Rs 500 crore via IPO

04 December 20233 mins read by Angel One
The IPO comprises both a Fresh Issue and an Offer for Sale, with Rs 250 crore allocated to the Fresh Issue and the remaining Rs 250 crore raised through the Offer for Sale.
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Kross Limited, a significant player in the manufacturing of crucial components for medium and heavy commercial vehicles and farm equipment segments, submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) on the first day of December.

As outlined in the DRHP, the company aims to raise a total of Rs 500 crore, with Rs 250 crore generated through an offer for sale and the remaining Rs 250 crore via a fresh issue of shares.

As mentioned, the IPO also encompasses an Offer for Sale, where the promoters sell their shares owned by them in the IPO. Sudhir Rai and Anita Rai are the selling promoters. Sudhir Rai plans to sell a maximum of equity shares, amounting to Rs 168 crore. Simultaneously, Anita Rai intends to sell a maximum of equity shares, totalling Rs 82 crore, as part of the offering by the Promoter Selling Shareholders.

As per the information provided, the company’s shares are scheduled to be listed on both Indian exchanges, namely NSE and BSE, upon their listing. Equirus Capital Private Limited serves as the book-running lead manager for the company’s IPO, while KFin Technology Limited has been appointed as the registrar for the IPO.

IPO Proceeds

The company plans to utilise the Net Proceeds, derived by deducting expenses from the Gross Proceeds of the Fresh Issue, for the following objectives:

  • Meeting capital expenditure requirements through the acquisition of machinery and equipment.
  • Repaying either in full or partially certain outstanding borrowings obtained from banks and financial institutions.
  • Fulfilling the Company’s working capital necessities.
  • Allocating funds for general corporate purposes.

Business Overview 

Kross Limited, a significant player is engaged in manufacturing essential components for medium and heavy commercial vehicles and farm equipment segments. These components include companion flanges, axle shafts, rear-end spindles, anti-roll bars, differential spiders, inter-axle kits, suspension linkages, universal joints, crosses, pole wheels, camshafts, and a diverse range of tractor parts. This range encompasses items for hydraulic lift systems, PTO shafts, and front axle spindles.

Kross Limited, whose major clients include Ashok Leyland and Tata International DLT Private Limited, distributes its products to a diverse range of customers. This clientele comprises major original equipment manufacturers (OEMs) producing M&HCVs and tractors, primary suppliers to these M&HCV segment OEMs, as well as local dealers and fabricators involved in its trailer axle and suspension business.

It has additionally garnered attention from new clientele, including Leax Falun AB, a Sweden-based company specialising in manufacturing propeller shafts for commercial vehicle OEMs, and an OEM from Japan focused on commercial vehicle production.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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