Bollywood Celebrities and Cricketers Back Karamtara Engineering in Pre-IPO Funding Round

Cricket players Rohit Sharma and Jasprit Bumrah, together with Bollywood actors Ranbir Kapoor, Karan Johar, Bimal Parekh and Aamir Khan, have invested in the pre-IPO round of power transmission company Karamtara Engineering.

Backwards-integrated, Karamtara Engineering produces goods for the transmission lines and renewable energy industries. It can act as a one-stop shop for solar structures (trackers and fixed-tilt) because of its wide range of products.

The company sells overhead gearbox line hardware fittings and accessories, lattice structures for gearbox lines and fasteners for the solar, wind, gearbox and industrial sectors.

 According to a public statement, the company's promoters, Tanveer Singh and Rajiv Singh, engaged in a secondary sale to transfer 3,409,724 equity shares at a total price of INR 310 each, for a total of INR 106 crore.

Khan acquired 1,29,050 shares for INR 4 crore, Kapoor acquired 1,61,300 shares for INR 5 crore, while Karan Johar acquired 4.85 lakh shares for INR 1.5 crore. According to the notice, Sharma and Bumrah also paid INR 2 crore apiece for 64,520 shares.

In January, Company Raised INR 307 Crore

On January 10 of this year, Karamtara, which is in competition with listed companies such as Inox Wind, KP Green Engineering, Premier Energies, Waaree Energies, and Suzlon Energy, raised INR 307.17 crore by offering 98.08 lakh shares at the same price to a number of investors.

The company received preferential allocations from well-known investors such as Jagdish Naresh Master, Utpal Hemendra Sheth, Singularity Growth Opportunities Fund, Gaurav Trehan, Quantum State Investment Fund, Ananta Capital Venture Fund, Jaidev Rajnikant Shroff, Axia Select Opportunities Fund, Mithun Padam Sacheti and Siddhartha Sacheti, and MNI Ventures.

Karamtara Engineering, situated in Mumbai, intends to raise INR 400 crore through an offer-for-sale process and INR 1,350 crore through a fresh issue component. In the offer-for-sale, promoters Tanveer Singh and Rajiv Singh would each be selling shares valued at INR 200 crore.

How Company Plans to Utilise Fresh Proceeds?

By using INR 1,050 crore of the proceeds from the new issuance to pay down debt and the remaining money for general corporate reasons, the company hopes to drastically lower its debt load. As of November 2024, it had outstanding acceptances under letters of credit totalling INR 733.6 crore and outstanding borrowings from banks and financial institutions totalling INR 586.4 crore.

JM Financial, ICICI Securities, and IIFL Capital Services will be the book running lead managers in charge of the public offering. In January, Karamtara Engineering submitted preliminary documents to the Sebi, the market watchdog, requesting permission to raise INR 1,750 crore through an IPO.

In FY2024, the company reported a Profit After Tax (PAT) of INR 102.65 crore, more than doubling the INR 42.36 crore recorded in the previous fiscal year. FY2023 revenues increased from INR 1,600.31 crore to INR 2,425.15 crore.