Karamtara Engineering IPO

About Karamtara Engineering Ltd IPO

The initial public offering (IPO) of Karamtara Engineering Ltd consists of a fresh issue of equity shares with a face value of ₹10 each, aggregating up to ₹1,350 crore. The offer for sale includes equity shares with a face value of ₹10 each, aggregating up to ₹400 crore.

The total offer size, combining both components, is up to ₹1,750 crores. Promoters involved in the offering include Tanveer Singh, Rajiv Singh, Inderjeet Singh, Inderjeet Tanveer Singh Trust and Inderjeet Rajiv Singh Trust. The IPO will open on a date TBA and close on a date TBA. The allotment of shares will take place on TBA and the credit of shares will take place on TBA.

Objectives of Karamtara Engineering Ltd IPO

The money raised from this issue, after deducting related expenses, will be used for the following purposes:

• Funding prepayment, repayment, or payment obligations to lenders.
• General corporate purposes.

Growth in renewable energy

The global energy landscape is witnessing a major shift toward renewable sources. Renewable energy capacity grew at a CAGR of 10.4% between 2018 and 2023 and is expected to grow at a CAGR of 13.6% from 2023 to 2028. This steady growth reflects the rising demand for clean energy and supportive government policies.

India's energy transition and GDP trends

India is moving away from coal-based power toward renewable energy. By Fiscal 2030, the country's total power generation capacity is projected to reach 751 GW, with 500 GW coming from renewable sources. Of this, 280 GW is expected to be generated from solar power.

India also remains the fastest-growing major economy, with 8.2% GDP growth in 2023, driven by stable domestic demand, investments, and favourable demographics. It is on track to become a $5 trillion economy by Fiscal 2026.

Karamtara Engineering Ltd Information

Karamtara Engineering Ltd, located in Mumbai, India, makes products for renewable energy and transmission lines. The company offers a wide range of products, acting as a one-stop shop for solar structures, including fixed-tilt and trackers. It also provides lattice structures for transmission lines, fasteners for solar, wind, transmission, and industrial sectors, as well as overhead transmission line hardware and accessories. Additionally, the company is entering the wind energy market by setting up a facility to make tubular towers for wind turbines, expected to start operating in the first quarter of Fiscal 2026.

Risks of Karamtara Engineering Ltd. IPO

Geographic and operational concentration risks

The company relies heavily on its manufacturing facilities, primarily located in Maharashtra, which contributed over 98% of revenue in recent years. This geographic concentration makes operations vulnerable to local disruptions such as natural disasters, regulatory changes, and infrastructure issues. Additionally, facility-specific risks like power failures, labor conflicts, and property disputes may significantly affect production.

Sector-specific dependency

A substantial portion of revenue (over 80%) comes from the solar energy industry. Any downturn in this sector, due to fluctuating consumer demand, policy changes, or economic conditions, could adversely impact revenue and profitability. Dependency on a single industry heightens the risk of revenue volatility.

Customer concentration risk

The top 10 customers accounted for over 63% of total revenue in Fiscal 2024. Dependence on a few key clients increases the risk of revenue fluctuations due to order cancellations, financial instability, or loss of business to competitors. Short-term, non-exclusive contracts further exacerbate this risk, potentially impacting long-term financial stability.

Anchor Investing Bidding Date: TBA

IPO Registrar and Book Running Lead Manager

Registrar - MUFG Intime India Private Limited

Book Running Lead Managers – JM Financial, ICICI Securities, IIFL Capital

Business Model

Karamtara Engineering Ltd is a fully backward-integrated manufacturer catering to the renewable energy and transmission line sectors. As of Fiscal 2024 and the six months ended September 30, 2024, the company stands as India's largest manufacturer of solar mounting structures and tracker components by installed capacity.

The company specialises in structures and fasteners for the solar energy and transmission sectors, along with overhead transmission line (OHTL) hardware fittings and accessories. Expanding its renewable energy footprint, the company is establishing a manufacturing facility for tubular towers used in wind turbines, with operations set to begin in the first quarter of Fiscal 2026.

With one of India's most extensive product offerings in the solar sector, Karamtara's portfolio includes solar module mounting structures (Solar MMS), solar tracker piles and piers, solar torque tubes, and lattice towers for transmission lines. Additionally, it manufactures fasteners such as bolts, nuts, studs, and washers, along with OHTL hardware fittings including insulator string fittings, jumper tubes, suspension clamps, and vibration dampers.

Karamtara Engineering Ltd Growth Trajectory

Over the last few years, the company's revenue from operations has shown significant growth, increasing from ₹1,244.80 crore in FY22 to ₹2,425.15 crores in FY24. EBITDA margin has also improved remarkably, rising from 10.43% in FY22 to 10.84% in FY24.

How to check allotment status of Karamtara Engineering Ltd IPO?

• Visit the Registrar's Website

Go to the official website of MUFG Intime India Private Limited, the registrar for this IPO. MUFG Intime India’s website has a page for checking IPO allotment status. On this page, enter your Permanent Account Number (PAN), application number, or Demat account ID. Then click the 'Submit' button. Your allotment status will be displayed.

• Check on the Bombay Stock Exchange Website

The Bombay Stock Exchange (BSE) also has an IPO allotment status page. Go to www.bseindia.com and find the 'Investors' tab. Under 'Investors', click on 'IPO'. This will take you to the IPO allotment status page.

On the BSE IPO page, follow these steps:

• Select 'Equity' from the dropdown menu
• Choose ‘Karamtara Engineering Ltd’ in the next dropdown
• Enter your application number
• Enter your PAN
• Click 'Search'

Your ‘Karamtara Engineering Ltd’ allotment status will be displayed.

1. Verify on the National Stock Exchange Website

The National Stock Exchange (NSE) has an IPO Bid Verification module. Use this to ‘Karamtara Engineering Ltd’ allotment status.

Go to www.nseindia.com and find the 'Invest' tab. Click on 'Verify IPO Bids' under 'Resources & Tools'.

On the NSE IPO Bid Verification page, enter:

• Application number
• PAN

Then click 'Submit'. Your ‘Karamtara Engineering Ltd. IPO’ bid and allotment details will be displayed.

How to apply for Karamtara Engineering Ltd IPO?

Here are the steps to apply for Karamtara Engineering Ltd IPO:

• Step 1: Log in to your Kotak Neo Demat account - Log in to your Demat account to access IPO investments. Next, select the current IPO section.
  
• Step 2: Specify IPO details - Enter the number of lots and the price you wish to apply for.
  
• Step 3: Enter UPI ID - After entering your UPI ID, click submit. This will place your bid with the exchange.
  
• Step 4: Mandate Notification - Your UPI app will receive a mandate notification to block funds.
  
• Step 5: Approve Request - Your funds will be blocked once you approve the mandate request on your UPI.