Karamtara Engineering Halves IPO Size To ₹875 Crore

Karamtara Engineering has cut the size of its proposed initial public offering (IPO) by half to ₹875 crore from the earlier ₹1,750 crore. The change comes after the company received regulatory nod to reduce the size of the fresh issue.

Under the revised structure, the IPO will consist of a fresh issue of equity shares aggregating up to ₹675 crore and an offer for sale (OFS) of up to ₹200 crore.

SEBI Approves Fresh Issue Reduction On 25 August

Karamtara Engineering had filed its original draft red herring prospectus (DRHP) on 22 January 2025. The company later filed an application with SEBI on 31 July 2026 seeking approval to reduce the fresh issue size by up to 50%.

SEBI approved the reduction in a letter dated 25 August 2026. The revision has been made in terms of SEBI’s communication dated 13 April 2026 which permits issuers to increase or decrease the fresh issue size by up to 50% on a case-to-case basis without re-filing the DRHP.

Fresh Issue And OFS Halved

Karamtara Engineering IPO's fresh issue has been brought down to ₹675 crore from ₹1,350 crore proposed in the original offer. Separately, the OFS has been reduced from ₹400 crore to ₹200 crore.

Promoters Tanveer Singh and Rajiv Singh will now offer shares aggregating up to ₹100 crore each through the OFS, compared with up to ₹200 crore each earlier. The company will not receive any proceeds from this portion of the offer, as the money will go to the respective selling shareholders after applicable expenses and taxes.

Karamtara Engineering Completes ₹75-Crore Pre-IPO Placement

The company has also undertaken a pre-IPO placement of compulsorily convertible preference shares (CCPS) worth ₹75 crore. The placement was completed before the filing of the red herring prospectus with the Registrar of Companies, and the amount raised has been reduced from the fresh issue.

Debt Commitments Reserved For ₹600 Crore

The company proposes to use the net proceeds of ₹600 crore toward prepayment, repayment and/or payment of obligations to lenders for borrowings and acceptances, either in part or in full. The balance will be used for general corporate purposes, with such expenditure not exceeding 25% of the gross proceeds.

On 31 July 2026, the company had aggregate standalone outstanding borrowings of ₹1,344.50 crore from banks and lending institutions, excluding vehicle loans. It also had an outstanding acceptance of ₹735.10 crore on account of letters of credit.

The addendum states that the repayment or prepayment of borrowings is expected to lead to a reduction in outstanding indebtedness and liabilities, lower debt-servicing costs and help the company maintain a healthy debt-equity ratio.

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