Tractor maker Carraro India’s IPO has opened. The company aims to raise over Rs 1800 crore and reiterated that it is in India for the longer term. The company highlighted that the demand scenario seems favourable for the tractor markets given improving market dynamics. Most analysts have suggested that the IPO is a subscribe for the longer-term.
Speaking to Financial Express.com about the timing of the IPO, Tomaso Carraro, Vice Chairman- Carraro Group pointed out that the company has long connection in India, starting from a join venture, then going independent, growing in the market, building the plants, building R&D Centre and explained how the growth over the last four years makes it a right time for launching the IPO now, “There was something that we were expecting for a long time. The growth is made by the change in technology for tractors. They are all going for the four-wheel drive tractors. So there is a big opportunity. So we have a big opportunity in India. So we wanted to establish a real Indian company, not just a branch of a multinational. The decision to go with the IPO is to only reiterate our intent.”
Carraro India: Business dynamics
Though globally there has been a slowdown in markets like Europe and US, Carraro explained that the balanced revenue portfolio is one of the company’s biggest positives. “We have 65% coming domestically and 35% from exports. In that again, there is a division between agriculture and construction, which is again 45% and 41% of the market. So in all ways, we have enough leverage that if one is a little bit slow, the other compensates for it. All in all, we feel there is not going to be any major setback from what is being estimated. But even if the market is flat, the forward driver grows 5% for us. It’s a big opportunity,” added Carraro.
Also Read: Carraro India IPO opens today: GMP, Price Band, Subscription Status and other key details you should know
Dr Balaji Gopalan, MD, Carraro India explained that “The timing for IPO is also critical, because we feel we are at the right threshold where the company is expecting the market in India to kind of grow up the technology ladder that is existing.
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