IPO Analysis: Craftsman Automation Limited

IPO Analysis: Craftsman Automation Limited

Craftsman Automation Limited is a diversified engineering company with vertically integrated manufacturing capabilities, engaged in three business segments, namely power train and other products for the automotive segment (“Automotive - Power train and Others”), aluminium products for the automotive segment (“Automotive – Aluminium Products”), and industrial and engineering products segment (“Industrial and Engineering”). They are 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. They are among the top 3-4 component players with respect to machining of cylinder block for the tractor segment in India. They are present across the entire value chain in the Automotive-Aluminium Products segment, providing diverse products and solutions. Company’s strong in-house engineering and design capabilities help them offer comprehensive solutions and products to their long standing domestic and international customers in each of the segments in which they operate.

Their comprehensive solutions include design, process engineering and manufacturing including foundry, heat treatment, fabrication, machining and assembly facilities. The core competence in machining and assembly of industrial and engineering products has helped them to establish themselves as a significant player in the Automotive - Power train and Others segment.

The key products in this segment are highly engineered and include engine parts such as cylinder blocks and cylinder heads, camshafts, transmission parts, gear box housings, turbo chargers and bearing caps. The end users for their products include OEMs producing commercial vehicles, special utility vehicle, tractors and off-highway vehicles. Additionally, they also provide machining services within its Automotive – Power train and Others segment.

Company Strength :

• Diversified engineering company with a focus on providing comprehensive solutions and manufacturing high quality, intricate and critical products, components and parts;
• Strong in-house process and product design capabilities with the ability to interchange capacity and product mix;
• Long term and well established relationships with marquee domestic and global OEMs;
• Extensive manufacturing footprint, with strategically located manufacturing facilities;
• Experienced management team supported by motivated and skilled work force;
• Robust financial performance in challenging business environment.

Objective of The Issue: 

The company purposes to utilize funds towards the following objectives;

• To make re-payment/pre-payment of company's borrowing fully or partially.
• To meet general corporate purposes.

Brief of Financials of the Company (in Rs Cr)

Important Dates to Remember:

Verdict:

Valuation is quite high, good company for investment. One can also purchase this IPO after listing. GMP is not yet available. Since their is action seen in primary market hence listing gains can be expected from this IPO.

Sources: Various publications

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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