The IPO, with a face value of Rs10 each, is a complete offer for sale (OFS) of up to Rs1,811.65 crore by Carraro International S.E. Carraro India is Pune-based manufacturer of transmission systems for off-highway vehicles
FinTech BizNews Service
Mumbai, August 24, 2024: Carraro India Limited, Pune-based manufacturer of transmission systems for tractors and off-highway vehicles, and other agricultural and construction equipment, has filed its draft red herring prospectus (DRHP) with capital market regulator Securities and Exchange Board of India (SEBI) to mop up funds through an initial public offering (IPO).
The IPO, with a face value of Rs10 each, is a complete offer for sale (OFS) of up to Rs 1,811.65 crore by Carraro International S.E.
The offer is being made through the book-building process, wherein not more than 50% of the offer shall be available for allocation on a proportionate basis to qualified institutional buyers, not less than 15% of the offer shall be available for allocation to non-institutional investors, and not less than 35% of the offer shall be available for allocation to retail individual investors.
Established in 1997, Carraro India, a subsidiary of Carraro S.p.A, began its manufacturing journey with transmission systems in 1999 and axles in 2000. The company started its operations using IP rights licensed from other entities within the Carraro Group and specializes in complex engineering products and solutions for original equipment manufacturer (OEM) customers. It serves as an independent tier 1 provider, concentrating on axles and transmission systems for agricultural tractors and construction vehicles.
The Board of Directors of Carraro India is led by Ettore Francesco Sequi, chairman and independent director; Tomaso Carraro, director and vice-chairman, who has been with Carraro Group since 1992 and has been fundamental in shaping the business and strategic market position of the Company. Other individuals in the Board are Balaji Gopalan, the Managing Director; Davide Grossi, the Chief Financial Officer; Sudhendra Mannikar, the Chief Operating Officer; Enrico Gomiero and Andrea Conchetto, Non- Executive Directors; Uma Mandavgane and Kishore Saletore, Independent Directors.
The Carraro Group are one of the leading independent tier 1 suppliers of transmissions systems and a key supplier of axles in the agricultural tractor and construction vehicle industries in India. Additionally, it has established itself as the market leader in providing transmission systems for tractors up to 150HP and four-wheel drive capabilities.
Historically, Carraro India’s design capabilities were provided through Carraro Technologies India Private Limited (CTIPL) and the Carraro Group. However, with the transfer of IP rights on October 1, 2023, and the acquisition of CTIPL in June 2024, it now offers integrated design services to its customers which has strengthened its competitive position in India. The Company has grown its business in the domestic market from almost all its products being exported in Fiscal 1997 to approximately 64.82% of its revenues arising from domestic sales in Fiscal 2024.
The company’s products are crucial components of its customers' final products, including various off-highway vehicles, gears, shafts, and ring gears for industrial and automotive vehicles. Its product offering includes axles and transmission systems for a range of agricultural tractors and construction vehicles, including backhoe loaders, soil compactors, cranes, self-loading concrete mixers, and small motor graders.
According to the Markets and Markets Report in its DRHP, Carraro Group has been a pioneer in the agricultural tractor and construction vehicle component market, supported by its dedicated R&D team. With 27 years in India, its subsidiary Carraro India has developed an extensive network of local and international customers and suppliers. The companies early market entry has allowed it to understand the market deeply, identify customer needs, and build lasting relationships. As of 2023, the Company is the leading sole supplier in the non-captive segment of the agriculture tractors transmission market and the market leader with a 60-65% share of the non-captive construction vehicle transmission market.
The report additionally highlights Carraro Group’s comprehensive service offering, which sets Carraro India apart in the Indian market. The ability to provide a seamless, end-to-end experience—from initial design and customization to material procurement, manufacturing, supply chain management, delivery, and after-sales service—is a significant differentiator.
Carraro India operates two manufacturing plants in Pune: one for drivelines and one for gears. These plants are equipped with advanced technologies for casting, machining, assembly, prototyping, testing, painting, and heat treatment. Capacity utilization of Driveline manufacturing plant for fiscal 2024 stood at 81.07% and for Gears manufacturing plant it was 89.94%.
As of March 31, 2024, the company supplied to 38 manufacturers in India and six internationally. Its key customers include large domestic and international OEMs, with long-term relationships lasting at least 15 years. Carraro exports to customers in Asia directly and indirectly, as well as to customers outside of Asia through Carraro Drive Tech Italia S.p.A. Its key clients in the agricultural tractor sector include CNH, TAFE, Mahindra and Mahindra, John Deere India Private Limited, Escorts Kubota, Action Construction Limited, and International Tractors Limited. In the construction vehicle sector, it serves CNH, Bull Machines, Liugong, Manitou Equipment, Doosan, Escorts Kubota, Mahindra and Mahindra, and Action Construction Limited. Additionally, CNH is a key customer in the other sectors.
Carraro India has developed extensive expertise in the agricultural tractor and construction vehicle industry in India and maintains a network of 189 suppliers across 8 states in India and 68 international suppliers. The company’s top 10 suppliers have been engaged for an average of 15 years.
Carraro India's revenue from operations increased by 4.44% from Rs1,695.12 crore in fiscal 2023 to Rs1,770.45 crore in fiscal 2024, primarily due to an increase in revenue from the sale of products; Profit after tax increased by 29.44% from Rs46.80 crore in fiscal 2023 to Rs60.58 crore in fiscal 2024.
Axis Capital Limited, BNP Paribas and Nuvama Wealth Management Limited are the book-running lead managers and Link Intime India Private Limited is the registrar of the offer. The equity shares are proposed to be listed on BSE and NSE.
