Kross Limited, a Jharkhand-based company specializing in trailer axles and suspension systems, is set to raise Rs 500 crores through an initial public offering (IPO). During a recent IPO meeting in Mumbai, company officials highlighted the strong demand they are experiencing from the Medium and Heavy Commercial Vehicle (MHCV) and tractor sectors. This surge in demand is expected to drive a 30-35% increase in the company’s overall operations for the fiscal year 2025-26, supported by a solid order book.
The officials also pointed out that the completion of a new foundry line, which includes an end-to-end backward integration program, is anticipated to enhance operational margins. “The recent completion of our new foundry line’s backward integration program is set to boost our operational margins significantly,” they stated.
Kross has demonstrated robust financial performance in recent years, with its topline profit for FY2024 rising by 27% to Rs 620.3 crore, up from Rs 489 crore in FY23. Additionally, the profit after tax increased to Rs 44.9 crore, compared to Rs 31 crore in the previous fiscal year.
Sudhir Rai, Chairman and Managing Director of Kross, informed Autocar Professional that the IPO proceeds will be allocated towards the company’s capital expenditure, including the purchase of machinery and equipment amounting to Rs 70 crore. Another Rs 90 crore will be used to repay or prepay outstanding loans, and Rs 30 crore will address the company’s working capital needs.
Out of the Rs 500 crore to be raised, promoters Sudhir Rai and Anita Rai will divest shares worth Rs 250 crore via the Offer for Sale (OFS) route, with Rs 168 crore and Rs 82 crore allocated to the promoters, respectively. The remaining shares will be available for public subscription.
Kross Limited which manufactures 60,000 trailer axles annually, is also a key player in the suspensions, truck components, and tractor components markets. In the trailer axle segment, it competes with companies like Ramkrishna Forgings Limited, Jamna Auto Industries Limited, Automotive Axles Limited, GNA Axles Limited, and Talbros Automotive Components Limited.
The company has recently expanded its customer base, securing orders from Leax Falun AB, a Swedish manufacturer of propeller shafts, and a Japanese OEM, for whom Kross has developed six new component families, soon to be exported.
Currently, Kross Limited operates five manufacturing facilities in Jamshedpur, Jharkhand, and serves as a Tier 1 supplier to Ashok Leyland, Tata International, and other major OEMs in the trailer axle and suspension equipment market.
Besides trailer axles and suspensions, Kross also offers high-performance forged and precision-machined safety-critical parts for medium and heavy commercial vehicles, as well as farm machinery. The IPO is priced between Rs 228 to 240 per share with a face value of Rs 5 per equity share. It will open for public subscription on September 9th, with a minimum bid requirement of 62 shares per lot.
