Is Jinkushal Industries IPO Worth Bidding With Positive GMP Buzz?

Jinkushal Industries, recognized as the largest non-OEM exporter of construction machinery in the nation, is set to launch its IPO valued at ₹116 crore starting September 25. This offering will conclude on September 29, with shares priced between ₹115 and ₹121. At the top end of the price range, the company is expected to achieve a post-issue market capitalization of approximately ₹464 crore.

The IPO consists of a fresh issue totaling ₹104 crore and an offer for sale of ₹11.6 crore. Funds raised from the fresh issue are designated for repaying debts, enhancing working capital, and various corporate needs.

GMP Buzz

The IPO has generated significant interest in the grey market, where shares are currently trading at a premium of around 35% above the issue price, indicating potential for substantial listing gains.

Company Overview

Jinkushal Industries has established itself as the leading Indian exporter of construction machinery outside the OEM market, holding nearly a 7% market share. Its operations span across more than 30 countries, including the UAE, Mexico, Belgium, South Africa, and Australia.

The company splits its business into three main areas: customized new construction machines, refurbished and used equipment, and its proprietary line of backhoe loaders branded ‘HexL’. Recently, it has also ventured into leasing logistics warehouses and renting out equipment. In FY25, Jinkushal reported revenues of ₹381 crore, reflecting a 59% increase from FY24, while achieving a net profit of ₹19 crore. However, its EBITDA margins dipped to 6.1%, down from 9.8% the previous year.

Valuation and Recommendation

When evaluating the upper price band, the IPO is priced at 30.1 times the earnings for FY25, and an EV/EBITDA ratio of 22x. Anand Rathi Research has given a “Subscribe – Long Term” rating, emphasizing that Jinkushal is a major player in the export of non-OEM construction equipment with a significant international presence. The shift towards its HexL brand signifies a strategic transition from trading to a more customer-focused, product-driven approach. However, the IPO appears to be fully valued at this time, hence they recommend long-term subscription.

GYR Capital Advisors serves as the book-running lead manager for this IPO, while Bigshare Services will function as the registrar.

As you consider investing, what aspects of Jinkushal Industries stand out to you the most?