Craftsman Automation Limited IPO

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(i) Craftsman Automation Limited started the Journey in the Year 1986 in Coimbatore, in the State of Tamil Nadu, India, founded by the Promoter, Chairman and Managing Director, Srinivasan Ravi, a mechanical engineer and a first-generation entrepreneur with over 32 years of relevant industry experience.

(ii) Craftsman Automation makes products under following segments;

a) Automotive – Powertrain and Others (revenue = 51%)
b) Automotive – Aluminium Products  (revenue = 21%)
c) Industrial and Engineering segments (revenue = 28%)

The core competence in machining and assembly of industrial and engineering products has helped them to establish themselves as a significant player in the Automotive – Powertrain and Others segment. They have leveraged their long 56 presence in developing aluminium products for precision components to establish and grow the Automotive – Aluminium Products segment.

Within the Industrial and Engineering segment, they have utilized in-house engineering and design capabilities and developed a diverse product portfolio including material handling equipment such as hoists, crane kits, industrial gears, gearboxes, locomotive components, other railway products, storage solutions, marine engines and accessories, tool room, mould base products and Special Purpose Machines (“SPM”), which includes metal cutting and non-metal applications such as washing and leak testing solutions.

Clients of Craftsman Automation

1.  Under Automotive – Powertrain and Others segment, the key customers include Daimler India, Tata Motors, Tata Cummins, Mahindra & Mahindra, Simpson & Co. Limited, TAFE Motors and Tractors, Escorts, Ashok Leyland, Perkins, Mitsubishi Heavy Industries, John Deere and JCB India.

2. Under Automotive – Aluminium Products segment, the key customers include Daimler India, TVS Motors, Royal Enfield, Perkins and Mahindra & Mahindra.

3. In industrial and engineering segment, they have clients such as Siemens and Mitsubishi Heavy Industries.

Manufacturing Facilities

Craftsman Automation own and operate 12 strategically located manufacturing facilities across seven cities in India, with a total built up area of over 1.5 million sq. ft. The manufacturing facilities include aluminium foundries, pressure dies casting facilities, machining and allied facilities, heat treatment, fabrication, and assembly facilities. The strong in-house engineering and design capabilities help them offer comprehensive solutions and products to the long-standing marquee domestic and international customers in the segments in which they operate.

To provide comprehensive solutions across the business segments, they have undertaken forward and backward integration enhancing the in-house manufacturing capabilities. These capabilities have evolved over a period of time to become standalone business segments catering to the customers, in addition to meeting the internal requirements.


They have a wholly-owned overseas subsidiary, Craftsman Europe B.V. (formerly known as Craftsman Marine B.V.), set up in 2008 in Netherlands, through which they are engaged in marketing, sales and servicing of marine engines and other associated equipment used in yachts.

Craftsman Automation Limited Strengths

1. A diversified engineering company with vertically integrated manufacturing capabilities and a focus on providing comprehensive solutions and manufacturing high quality, intricate and critical products, components and parts.
2. Strong in-house process and product design capabilities.
3. Long-term and well-established relationships with marquee domestic and global OEMs.
4. Extensive manufacturing footprint, with strategically located manufacturing facilities having the ability
to interchange capacity and product mix.
5. Experienced management team supported by motivated and skilled work force.
6. Robust financial performance.


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Objects of the Craftsman Automation Limited IPO:

Craftsman IPO is a combination of Fresh shares and OFS. 1. OFS ( 673 Crores) Here, the existing investors are selling the shares. 1. SRINIVASAN RAVI is selling 130,640 shares. 2. MARINA III (SINGAPORE) PTE is selling 1,559,260 shares. 3. INTERNATIONAL FINANCE CORPORATION is selling 1,414,050 shares. 4. K. GOMATHESWARAN is selling 1,417,50 shares. 2. Fresh Issue (150 Crores) a) Repayment/pre-payment, in full or part, of certain borrowings. b) General corporate purposes.

Craftsman Automation Limited IPO Details:

Open Date: Mar 15 2021
Close Date: Mar 17 2021
Total Shares: 55,28,161
Face Value: ₹ 5 Per Equity Share
Issue Type: Book Built
Issue Size: 824 Cr.
Lot Size: 10 Shares
Issue Price: ₹ 1488-1490 Per Equity Share
Listing At: NSE,BSE
Listing Date: Mar 25 2021

Promoters And Management:

Promoters of Craftsman Automation Limited Company are: Srinivasan Ravi is the Chairman and Managing Director of the Company. He holds a bachelor’s degree in mechanical engineering from PSG College of Technology, Coimbatore. He is the Promoter of the Company. He has been associated with the Company since incorporation and has experience of more than 32 years in the automotive industry. He has received various awards, including “Outstanding Citizen of Coimbatore Award” by Rotary Club of Coimbatore in 2018, “Entrepreneur of the Year 2015 Award” by Entrepreneurs’ Organization, Coimbatore, “Outstanding Entrepreneur Achiever Award 2012” by Bharathiar School of Management and Entrepreneur Development, Bharathiar University, Coimbatore and “Best Entrepreneur Award” by Coimbatore Management Association in 2010.

Financials of Craftsman Automation Limited IPO:

Particulars (cr) 6MFY21 Mar-20 Mar-19 Mar-18
Sales 534 1,492 1,818 1,512
Cost of Materials Consumed 218 572 710 592
Changes in Inventories 11 15 -7 -16
Employee Benefit Expenses 57 171 217 199
Other expenses 102 337 455 411
Operating Profit 146 397 443 326
OPM % 27.34% 26.61% 24.37% 21.56%
Other Income 3 9 14 11
Interest 52 148 141 112
Depreciation 87 195 176 149
Profit before tax 10 57 140 44
Net Profit 7 41 97 32
No. of shares 2.01 2.01 2.01 0.10
EPS in Rs 3.46 20.41 48.39 15.67

Comparison With Peers:

Name of the company 5-year Rev. Growth 5 year PAT Growth EBITDA Margin (FY20) ROE  (FY20) D/E P/E
Craftsman Automation (3 Years) -1% 13% 26% 5.70% 0.89 57.00
Bharat Forge 1% -13% 13% 6.65% 0.87 82.28
Endurance 7% 18% 16% 18.81% 0.18 36.54
Jamna Auto 1% 11% 10% 9.27% 0.09 58.75
Mahindra CIE 9% -4% 8% 7.64% 0.34 17.40
Minda 20% 25% 11% 8.94% 0.53 93.38
Sundram Fasteners 3% 20% 16% 16.29% 0.34 30.10
Ramkrishna Forgings 10% -32% 17% 1.11% 1.24 181.89

Recommendation on Craftsman Automation Limited IPO:

Review and Recommendation of InvestorZone are 3/10 [The company's revenue is declining over the years. The IPO is mostly OFS ,where most of the money will go to promoters pocket. The asking valuation is very high.]

Lead Manager of Craftsman Automation Limited IPO:

  1. ICICI Securities Limited
  2. IIFL Holdings Limited
  3. SBI Capital Markets Limited

Registrar of Craftsman Automation Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Senthel Towers, 4th Floor, 1078, Avanashi Road, Coimbatore 641 018, Tamil Nadu, India Phone No. 91 422 302 1000 Fax No. 91 422 302 1056 E-mail: Website:

Discussion on Craftsman Automation Limited IPO:


    IFC, the shareholder in Craftsman is making 7x return in 10 years via this IPO.

    International Finance Corporation has bought stakes in the company in 2010, by acquiring 66,263 shares at Rs. 6,791.12 per share. Their total investment was ~50 Crores.

    In 2017, the company did a bonus issue of 3 shares for every 4 shares held.

    IFC total shares after bonus = 1,15,960

    In 2018, the company did a split of face value from 100 to 5.

    IFC total shares after split = 23,19,200

    Current share price of IPO = 1490

    Total investment value = ~350 crores.

    This is how big money is made by doing right investment early in the company and then cashing out once the IPO comes. Most of the IPOs are the route to help investors exit.

    Valuation of the Craftsman IPO;

    Total shares outstanding after IPO = 2,11,28,311

    Issue Price = 1490

    Mcap = 3100 Crores

    Revenue = 1500 Crores

    EPS (3 years average) = 26

    P/E = 57x

    The asking valuation is very high.

    Let us see how strong the balance sheet is?

    In order to check the strength of balance sheet, following are the parameters.

    1. D/E = .89x (under 1 is reasonable)

    2. Current Ratio = 0.85x (under 1 is sign of danger)

    This ratio shows that the company’s liability in short term are more as compared to its assets.

    D/E is fine but current ration of less than 1 is a worrisome sign.

    Capex data:
    1. FY18 = 203 crores.
    2. FY19 = 355 Crores
    3. FY20 = 138 Crores
    4. 6MFY21 = 50 Crores.

    This shows that in the last 3-4 years, the company has done investment worth ~750 Crores in property, plan and equipment.

    They are the largest player involved in the machining of cylinder blocks and cylinder heads in the intermediate, medium and heavy commercial vehicles segment as well as the construction equipment industry and are also among the top 3-4 players in machining of cylinder blocks for tractor segment in India.

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