Those who got Craftsman Automation IPO shares lost 9% of their investment in the first tick

• Shares of Craftsman Automation listed on the stock exchanges at ₹1,359 per share, which is nearly 9% less than the issue price.
• The company’s initial public offer (IPO) was oversubscribed by 3.82 times.
• It intends to use parts of the proceeds towards repaying its loans worth ₹120 crore, while the rest will go to shareholders selling their shares – the promoters and investors.

Shares of Craftsman Automation, a Coimbatore-based manufacturer of engineering products, debuted at ₹1,359 per share, which is nearly 9% lower than its issue price of ₹1,490.

At 10:05 am, the share price of Craftsman Automation was hovering around ₹1,415, down by 5% over the issue price.

The engineering products and services company floated its ₹824 crore initial public offer (IPO) earlier this month. The IPO was oversubscribed by 3.82 times, with qualified institutional investors leading the fray.

The Coimbatore-based Craftsman Automation plans to repay its debts worth ₹120 crore from the proceeds of the IPO. The remaining amount will go to the promoters and investors who are selling their shares.

The grey market premium for Craftsman Automation’s shares was hovering around the ₹30-35 mark, which translates to approximately 2% of the issue price of ₹1,490. It is worth noting that grey market premium is not an official measure of market premium.

Craftsman Automation commenced operations in 1986. It has vertically integrated manufacturing capabilities and primarily caters to three business verticals – automotive-powertrain, automotive-aluminum, and industrial & engineering.

Craftsman is the leading player when it comes to machining of cylinder blocks and cylinder heads which are used in the commercial vehicles and construction equipment industries. It is also one of the top companies when it comes to supplying these parts in the tractor segment.

In its IPO note, SMC Global Securities stated that Craftsman Automation’s revenue is diversified across customers, which shields it from the market uncertainties.

“Its diversification of revenue across multiple customers allows it to prevent any possible customer concentration in any of its business segments,” stated a report by SMC Global Securities dated March 10.

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