Jinkushal Industries IPO opens with healthy GMP buzz. Should you bid?

Jinkushal Industries, the country's largest non-OEM exporter of construction machinery, will launch its Rs 116 crore IPO on September 25. The issue will close on September 29. The price band has been fixed at Rs 115–121 per share, with a lot size of 120 shares. At the upper end, the company will command a post-issue market cap of about Rs 464 crore.

The offer comprises a fresh issue of Rs 104 crore and an offer for sale of Rs 11.6 crore. Proceeds from the fresh issue will be used to repay borrowings, fund working capital, and for general corporate purposes.

GMP buzz

The IPO has already attracted strong interest in the grey market, where shares are quoting at a premium of about 35% over the issue price, suggesting the possibility of healthy listing gains.

Company overview

Jinkushal Industries has emerged as the largest Indian exporter of construction machinery outside the OEM ecosystem, with a market share of nearly 7%. The company has a presence in over 30 countries, including the UAE, Mexico, Belgium, South Africa and Australia.

Its business is divided into three verticals: customized new construction machines, refurbished and used machines, and its own brand 'HexL' of backhoe loaders. Over time, it has added leasing of logistics warehouses and equipment rental to its revenue streams.

In FY25, Jinkushal reported revenues of Rs 381 crore, a 59% jump over FY24, with profit after tax of Rs 19 crore. EBITDA margins, however, moderated to 6.1% from 9.8% in the previous year.

Valuation and recommendation

At the upper price band, the IPO is valued at 30.1 times FY25 earnings, with EV/EBITDA of 22x.

Anand Rathi Research has assigned a "Subscribe – Long Term" rating, saying: "Jinkushal is among the largest exporters of non-OEM construction equipment, with an international presence in the UAE and USA. The company’s strategic shift towards its proprietary HexL brand marks a move from trading to a product-driven, customer-centric model. However, the IPO appears fully priced. We recommend a long-term subscription."

GYR Capital Advisors is the book-running lead manager, while Bigshare Services will act as registrar.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)