Craftsman Automation Limited IPO – Date, Price, Review & Details

Maitri Parikh

View – Long & Short Term Investors Can Apply

Issue Highlights

Craftsman Automation Ltd is considered to be among top 5 automation companies in India and is coming with a public offer to raise around INR 824 crores.

Issue Details

Company Strengths

  • Strong in-house process & product design capabilities.
  • Long term & well established relationships with marquee domestic and global OEMs.
  • Wide manufacturing trail; strategically located manufacturing facilities.
  • Experienced management team supported by motivated & skilled work force
  • Robust financial performance

Valuation

The company is getting listed at a forward FY 21 P/E of 44.4 at upper price band, against sector PE of 61.61. It is getting listed at attractive valuation.

Issue Break-Up

Utilization of Funds

Background highlights of the company in brief

  • Incorporated in 1986 as a small scale industry in South India, Craftsman Automation has grown to become a leader in precision manufacturing in diverse fields.
  • It is a diversified engineering company with vertically integrated manufacturing capabilities, engaged in three business segments, namely powertrain and other products for the automotive segment (“Automotive – Powertrain and Others”), aluminum products for the automotive segment (“Automotive – Aluminum Products”), and industrial and engineering products segment (“Industrial and Engineering”).
  • Craftsman is the largest player involved in the machining of cylinder blocks and cylinder heads in the intermediate, medium and heavy commercial vehicles segment as well as in the construction equipment industry in India.
  • The company’s solutions include design, process engineering and manufacturing including foundry, heat treatment, fabrication, machining, and assembly facilities.
  • The company’s key products in Powertrain segment includes engine parts such as cylinder blocks and cylinder heads, camshafts, transmission parts, gear box housings, turbo chargers and bearing caps.
  • It has its geographical presence in cities including Coimbatore, Chennai, Pune, Indore, Jamshedpur, Faridabad and Bangalore.
  • It owns and operates 12 strategically located manufacturing facilities across seven cities in India, with a total built up area of over 1.5 million sq. ft.
  • The company’s key customers includes Daimler India, Tata Motors, Tata Cummins, Mahindra & Mahindra, Simpson & Co. Limited, TAFE Motors and Tractors, Escorts, Ashok Leyland, Perkins, Mitsubishi Heavy Industries, John Deere and JCB India.
  • The company has a wholly-owned overseas subsidiary, Craftsman Europe B.V., set up in 2008 in Netherlands, through which it is engaged in marketing, sales and servicing of marine engines and other associated equipment used in yachts.
  • Its sales volume, in terms of tonnage, from the Automotive – Aluminum Products segment was 9,339.32 tones, 12,596.22 tones, 18,863.83 tones and 11,819.04 tones for the nine months ended December 31, 2020 and Fiscals 2020, 2019 and 2018, respectively.
  • The company’s EBITDA Margin was 28.81%, 27.24%, 25.12% and 20.19%, for the nine months ended December 31, 2020 and Fiscals 2020, 2019 and 2018 respectively, having increased at a CAGR of 16.15%, from Fiscal 2018 to Fiscal 2020.

Briefing about directors & key managerial personnel

Briefing Financials

Balance Sheet

Statement of Profit and Loss

Key Ratios

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