Can Bonfiglioli Transmissions IPO deliver long-term growth for high-risk investors?
Bonfiglioli Transmissions aims to raise Rs2,534 crore through an upcoming offer for sale. The promoter group's stake will reduce from 100% to 77% post-IPO. The company has market leadership in various sectors, including industrial automation and construction. Revenue and net profit have shown significant growth in recent years, indicating strong financial performance. Investors with a high-risk…
Bonfiglioli Transmissions, a high-precision gearboxes and drive systems manufacturer, is set to raise Rs2,534 crore through an offer for sale. This IPO will reduce the promoter group's stake from 100% to 77%. The company boasts market leadership across various segments, with an expanding Ebitda margin since December 2023. A significant portion of raw materials is sourced internationally, exposing the firm to currency fluctuations.
As of 1998, Bonfiglioli Transmissions manufactures mission-critical and highly precision geared motors, gearboxes, and drive systems for sectors like industrial automation, construction, mining, material handling, and pharmaceuticals. The Italian-based firm's three major verticals contribute 41%, 25%, and 32% to revenue respectively.
With a Frost & Sullivan study indicating a 67.9% market share among domestic manufacturers of yaw and pitch drives for wind turbines, Bonfiglioli Transmissions faces a unique challenge in terms of comparable listed peers. Its P/E multiple stands at 46, significantly higher than that of other gearbox, bearings, and power transmission companies like Elecon Engineering, Timken India, and Shanthi Gears.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
