Kross, a manufacturer specialising in trailer axle and suspension assemblies, has submitted preliminary documents to the capital markets regulator for an initial public offering (IPO) aiming to raise Rs 500 crore.

The IPO encompasses a dual strategy, involving a fresh issuance of shares totalling Rs 250 crore by the company and an offer-for-sale (OFS) of shares amounting to Rs 250 crore by promoters. Sudhir Rai and Anita Rai, the promoters, plan to sell shares worth Rs 168 crore and Rs 82 crore, respectively, through the OFS.

Additionally, the Jharkhand-based company, engaged in the production of forged and machined components, is contemplating a pre-IPO placement to raise Rs 50 crore. If the pre-IPO placement materialises, the fresh issue size will be reduced by Rs 50 crore.

The allocated net fresh issue proceeds will be utilised for machinery and equipment procurement (Rs 70 crore), working capital requirements (Rs 30 crore), and debt repayment (Rs 90 crore). The remaining funds will be earmarked for general corporate purposes.

Kross, a Rai-family promoted entity serving the M&HCV and farm equipment segments, has demonstrated robust financial performance. For the fiscal year ending March FY23, the company reported a 154.2 per cent YoY increase in profit to Rs 30.93 crore. During the same period, revenue from operations surged by 64.3 per cent YoY to Rs 488.6 crore. EBITDA witnessed a substantial 95 per cent YoY growth to Rs 57.5 crore, with a margin expansion of 184 bps at 11.77 per cent for the year.

In the first quarter of the current fiscal year (FY24), Kross recorded a profit of Rs 8 crore on revenue of Rs 143.7 crore.