Jinkushal Industries IPO

About Jinkushal Industries IPO

Jinkushal Industries Limited IPO is an IPO of up to 96,50,000 equity shares. It consists of an offer for sale of up to 10,00,000 equity shares and a fresh issue of up to 86,50,000 equity shares. The lot size and price range are TBA. The shares will be allotted on TBA. The credit of shares to the demat account will take place on TBA and the initiation of refunds will take place on TBA.

Objective of Jinkushal Industries IPO

• To meet the working capital requirements.
• General corporate purposes.

Industry Outlook

The global market for used construction equipment involves the buying and selling of pre-owned machinery and vehicles utilised in the construction sector, such as excavators, loaders, bulldozers, cranes, and more. The used construction equipment market has shown consistent growth, with an estimated value of USD 13,240 crore in CY24. This growth is mainly fuelled by two significant factors: (a) the rise in infrastructure development and construction activities in emerging economies, and (b) the cost- effectiveness of used equipment compared to new machinery. Looking forward, the market is expected to reach USD 17,720 crore by CY29, with a CAGR of 6.0% during the forecast period.

The procurement of new construction machinery is primarily facilitated through OEMs, which either sell equipment directly or through a network of authorised distributors. Additionally, dealers and intermediary suppliers play a crucial role in bridging the gap between manufacturers and buyers, ensuring market accessibility and streamlined distribution.

India’s engineering exports have demonstrated steady growth over the years, registering a CAGR of 9.8% from FY20 to FY24. The sector peaked at USD 11,210 crore in FY22, followed by a marginal decline in FY23 due to global economic headwinds before recovering to USD 10,930 crore in FY24.

The Indian capital goods export sector has exhibited strong growth, with exports rising at a CAGR of 13.2% from FY19 to FY24. Machine Tools and Plastic Machinery are the sectors that have recorded the sharpest rise in exports, with 19% and 54% respectively during FY19–FY24. The Heavy Electrical Equipment segment remains the largest exported sub-sector, growing at a CAGR of 14.0% from FY19 to FY24. It is followed by Process Plant Equipment and Earthmoving and Mining Machinery, growing at a CAGR of 4.2% and 17.7% respectively during this period.

Company Information

Jinkushal Industries Limited is engaged in export trading of new/customised and used/refurbished construction machines in global markets. They primarily operate across three primary business verticals: (i) export trading of customised, modified and accessorised new construction machines; (ii) export trading of used/refurbished construction machines; and (iii) export trading of their own brand ‘HexL’ construction machines (presently in the category of backhoe loaders) to cater to a diverse international customer base. In addition to the aforementioned primary business verticals, they also derive a small portion of revenue from (i) leasing of their logistics warehouses; and (ii) renting of construction machines. They specialise in export trading of construction machines such as hydraulic excavators, motor graders, backhoe loaders, soil compactors, wheel loaders, bulldozers, cranes, and asphalt pavers.

Risks of Jinkushal Industries IPO

• They are heavily dependent on the export market and derive the majority of their revenue from the export trading of construction machines, and therefore are vulnerable to a range of risks associated with the export market : Engaging in international markets exposes them to various challenges, including adherence to complex and frequently changing local laws and regulations, and trade relations with India. The dynamic nature and increasing complexity of these regulatory frameworks, coupled with associated compliance costs, obligations, and potential liabilities, pose significant operational and financial risks.

• A significant portion of their revenue is derived from select geographies such as Mexico and the UAE. Any adverse developments in these markets could adversely affect their business : Their revenue remains significantly dependent on select geographies such as Mexico and the UAE, which accounted for a major portion of their revenue during the relevant periods. Any adverse economic, political, regulatory, or social developments in these countries could impact their business operations and financial performance.

• They are dependent on third-party suppliers, and any disruptions in the supply or an increase in the prices of requisite construction machines could adversely affect their operations : As they operate without long-term procurement contracts, they are vulnerable to changes in pricing, availability, and supplier priorities. There is no assurance that they will continue to receive machines of the required quality, on commercially acceptable terms, or within the expected timeframe. In the event of any disruption, including supplier insolvency, discontinuation, or performance failure, their ability to fulfil orders could be materially impacted.

IPO Registrar and Book Running Lead Managers

Book running lead managers: GYR Capital Advisors Private Limited

Registrar for the IPO : Bigshare Services Private Limited

Business Model

The company earns its revenue through the following sources:

• They primarily operate across three main business verticals: (i) export trading of customised, modified, and accessorised new construction machines; (ii) export trading of used/refurbished construction machines; and (iii) export trading of their own brand ‘HexL’ construction machines (presently in the category of backhoe loaders) to cater to a diverse international customer base.

• They also derive a small portion of revenue from (i) leasing their logistics warehouses; and (ii) renting construction machines.

Company Growth Trajectory

Their revenue from operations, EBITDA, and restated profit after tax have all steadily increased from fiscal 2022 to fiscal 2024 and to the nine-month period ended 31 December 2024. Specifically, their revenue from operations reached ₹302.51 crores in the nine-month period ended 31 December 2024, ₹238.59 crores in fiscal 2024, ₹233.45 crores in fiscal 2023, and ₹176.96 crores in fiscal 2022, demonstrating a CAGR of 21.53% during this period. Additionally, their EBITDA rose from ₹12.32 crores in fiscal 2022 to ₹14.68 crores in fiscal 2023, then to ₹27.57 crores in fiscal 2024, and to ₹25.13 crores in the nine-month period ended 31 December 2024. Their restated profit after tax also saw significant growth, increasing from ₹8.57 crores in fiscal 2022 to ₹10.12 crores in fiscal 2023, and reaching ₹18.64 crores in fiscal 2024, and ₹18.12 crores in the nine-month period that ended on 31 December 2024.

Company Market Position

As per the CareEdge Report, JKIPL is the largest non-OEM construction machines exporter with a 6.9% market share. JKIPL is recognised as a Three-Star Export House by the Directorate General of Foreign Trade (“DGFT”), Government of India. They have carried out export trading of refurbished, customised, modified, accessorised new and used construction machines to over thirty (30) countries across the globe, primarily to various overseas wholesale buyers, distributors, importers, and some end users including construction and rental companies. During the nine-month period that ended on 31 December 2024 and the last three fiscals, they have exported to over ten countries including Mexico, UAE, Australia, Netherlands, UK, etc. During the nine-month period that ended on 31 December 2024 and fiscal 2024, fiscal 2023 and fiscal 2022, they catered to over 31 customers, 32 customers, 18 customers, and 29 customers respectively, out of which around 14 customers have been associated with them for over a period of three years.

How To Check Allotment Status of Jinkushal Industries IPO?

You can check the allotment status of shares either on the website of the Securities and Exchange Board of India (SEBI) or on the website of the registrar Bigshare Services Private Limited. To check the status on the SEBI website:

• Visit the SEBI website
• Click on “Investor Services” and choose “Application Status Check”
• Choose the issue type — Equity or Debt (Equity in this case)
• Select the Issue Name from the drop-down. The issue name is the company’s name, which is Jinkushal Industries Limited
• Enter your application number or PAN number
• Check the box which says “I’m not a Robot” and click on “Search” to know the allotment status

Follow these steps to know the allotment status on the registrar’s website:

• Visit the Bigshare Services Private Limited website
• Choose “Public Issues” from the “Investor Services” drop-down
• Select Jinkushal Industries Limited from the drop-down
• Enter your PAN number or Application number
• Click on “Submit” to know the allotment status

How To Apply for Jinkushal Industries IPO?

• Step 1: Log in to your Kotak Securities Demat account: Log in to your Demat account to access IPO investments. Next, select the current IPO section.
• Step 2: Specify IPO details: Enter the number of lots and the price you wish to apply for.
• Step 3: Enter UPI ID After entering your UPI ID, click submit. This will place your bid with the exchange.
• Step 4: Mandate Notification: Your UPI app will receive a mandate notification to block funds.
• Step 5: Approve Request Your funds will be blocked once you approve the mandate request on your UPI.