Ajax Engineering IPO Debuts at 8% Discount, Analysts Stay Positive: Here's Why

Ajax Engineering shares made a muted debut on the bourses on Monday, 17th February 2025. On the National Stock Exchange (NSE), shares of the concrete equipment maker listed at Rs 576 per share, reflecting an 8.43% discount from the IPO issue price of Rs 629. On the BSE, Ajax Engineering shares listed at Rs 593 per share, a discount of 5.71% against the issue price.

Ajax Engineering’s initial public offering (IPO), valued at Rs 1,269.35 crore, was open for subscription from 10th to 12th February. Ahead of the listing, the company’s shares were trading at Rs 626, a discount of Rs 3 or 0.48% from the upper end of the price band in the grey market.

Ajax Engineering's IPO was entirely an offer for sale (OFS) of 2.02 crore shares, with no fresh equity component. The company had offered its shares in the price band of Rs 599-629 per share, with a lot size of 23 shares. The IPO raised Rs 379.32 crore from anchor investors on 7th February 2025.

Ajax Engineering IPO: Should you buy, sell, or hold?

Amid the market turbulence, Ajax Engineering’s listing was below market expectations of a flat listing. However, it successfully attracted investors from all categories, and analysts remain optimistic about its future prospects.

Prashanth Tapse, Senior VP (Research) at Mehta Equities, says despite the weaker opening, we remain optimistic. Given the company’s virtual monopoly in SLCM and the increasing infrastructure development in India with rising demand for automated concrete solutions, we believe Ajax is well-positioned to cater to India’s booming construction and infrastructure sector.

“Hence, looking at all the positive long-term attributes, we recommend investors to ‘hold’ Ajax Engineering Ltd IPO for the long term. Considering the market trend, those who wish to accumulate on the dip should wait and watch for better discounted prices in this market scenario,” Tapse said.

Palak Devadiga, research analyst at StoxBox, says the company has a comparatively lower PE ratio than its industry peers.

“We thus recommend that investors who have been allocated shares hold onto them and closely watch how the company performs in the upcoming quarters,” Devadiga said.

The company will not receive any proceeds from the issue. Each of the selling shareholders will be entitled to the respective proportion of the proceeds of the OFS after deducting its portion of the offer-related expenses and the relevant taxes thereon.

ICICI Securities Limited, Citigroup Global Markets India Private Limited, JM Financial Limited, Nuvama Wealth Management Limited, and SBI Capital Markets Limited acted as the book-running lead managers of the Ajax Engineering IPO. Link Intime India Private Ltd was the registrar for the issue.

The IPO was overall subscribed 6.45 times. The portion reserved for qualified institutional buyers (QIBs) was subscribed around 14.41 times, the non-institutional investors (NIIs) portion was booked 6.47 times, and the retail investors' quota was subscribed 1.93 times during the three-day bidding process. The portion booked for employees was subscribed 2.62 times during the process.

About Ajax Engineering

Incorporated in July 1992, Bengaluru-based Ajax Engineering manufactures a wide range of concrete equipment and services across the value chain. As of 31st March 2024, the company has developed 110 concrete equipment variants for the value chain and sold over 27,800 units in India in the last 10 years.

Ajax holds a 75% market share in SLCMs (self-loading concrete mixers) in India and offers a diverse portfolio, including batching plants, transit mixers, concrete pumps, boom pumps, slip-form pavers, and 3D concrete printers.

The concrete equipment market in India, particularly for SLCMs, is experiencing significant growth driven by various factors. The company has an established dealer-led distribution and service model, comprising 51 dealers across 23 states, and caters to end customers across specialised sectors such as transportation infrastructure, irrigation, and large-scale infrastructure projects.

(Disclaimer: The views expressed by the spokespersons in this article are their own and do not constitute financial advice.)