Coimbatore-based Craftsman Automation, a diversified engineering company supplying parts to automotive and industrial sectors, has fixed a price band of ₹1,488-1,490 per equity share for its initial public offer, which will open for subscription on March 15.

The three-day public issue will conclude on March 17 and the IPO is expected to fetch ₹824 crore at the upper end of the price band. Bidding for anchor investors will open on March 12.

The proposed IPO comprises a fresh issue of equity shares up to ₹150 crore and an offer-for-sale of up to 4.52 million shares by promoter and existing shareholders.

Those diluting shares in the issue include Srinivasan Ravi, K Gomatheswaran and Marina III (Singapore) Pte Ltd and International Finance Corporation (IFC). Marina III and IFC are selling some part of their stakes and they will continue to hold stake in the company. Post-IPO, promoters’ stake will stand at about 60 per cent.

Half of the issue is reserved for qualified institutional buyers, 35 per cent for retail investors and 15 per cent for non-institutional bidders.

"The company had a debt of ₹1,000 crore plus a year ago and we reduced it by ₹130-140 crore during the pandemic. With the IPO proceeds, we hope to reduce the debt further by about ₹130 crore," Srinivasan Ravi, Chairman & Managing Director, told in a virtual conference with mediapersons.

Axis Capital and IIFL Securities have been appointed as book-running lead managers to the issue. Shares of the company are proposed to be listed on BSE and NSE.

Ravi said the company has de-risked its business model by diversifying across its business segments over the years. It has well-established relationships with marquee domestic & global vehicle makers.

The 35-year-old company has three business segments – automotive-powertrain (commercial vehicle forms major portion of this business), automotive-aluminium products and industrial engineering. These segments contributed 48 per cent, 17 per cent and 35 per cent, respectively, to the topline, which was ₹1,492 crore in FY20.

“We have already incurred significant capex and look forward to interesting growth period in the coming years due to our engineering capabilities,” he added.

During the first three quarters of this fiscal, the company has clocked revenues of more than ₹1,000 crore. Its EBITDA margin is the highest among the top auto parts companies in the country. It was 27 per cent in FY20 and grew to 28.81 per cent this fiscal.