Jinkushal Industries
- Jinkushal Industries is coming out with a 100% book building; initial public offering (IPO) of 95,99,548 shares of 10 each in a price band Rs 115-121 per equity share.
- Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
- The issue will open for subscription on September 25, 2025 and will close on September 29, 2025.
- The shares will be listed on BSE as well as NSE.
- The face value of the share is Rs 10 and is priced 11.50 times of its face value on the lower side and 12.10 times on the higher side.
- Book running lead manager to the issue is GYR Capital Advisors.
- Compliance Officer for the issue is Manish Tarachand Pande.
Profile of the company
Jinkushal Industries is engaged in export trading of new/customized and used/refurbished construction machines in global markets. It is the largest Non-OEM construction machines exporter with a 6.9% market share. It is recognized as Three-Star Export house by Directorate General of Foreign Trade (DGFT), Government of India. Currently, the company has exported construction machines to over 30 countries, including UAE, Mexico, Netherlands, Belgium, South Africa, Australia, and UK.
The company primarily operates across three primary business verticals; (i) export trading of customized, modified and accessorized new construction machines; (ii) export trading of used/refurbished construction machines; and (iii) export trading of its own brand ‘HexL’ construction machines (presently in category of backhoe loaders) to cater a diverse international customer base. Each of these verticals is structured to improve operational efficiency and reach a wide customer base, ensuring that its exported machines align with the required performance standards, durability expectations, and specific application needs.
It specializes in export trading of construction machines such as hydraulic excavators, motor graders, backhoe loaders, soil compactors, wheel loaders, bulldozers, cranes, and asphalt pavers. Its operations extend beyond plain export trading as it endeavors to leverage its technical knowhow and systematic processes to refurbish, customize, modify, and accessorize both used and new construction machines, either in-house or on through third party vendors, before export sales to ensure optimized functionality, efficiency, and performance to meet customers’ specific requirements.
Proceed is being used for:
- Meeting long term incremental working capital requirements
- General corporate purposes
Industry Overview
The Indian Construction equipment (CE) market can be broadly divided into five main categories as given in following table. Of the five, earth moving equipment segment has the largest share accounting for 69% in the overall construction equipment category. This is because these machines perform various tasks such as soil grading, trench digging, demolition, dirt and rock removal, and foundation laying. Clearance of mining and construction (road building and real estate) projects in recent years have led the earth moving segment to occupy a major share of the construction equipment market, followed by material handling and concrete equipment.
The growth of CE industry is interlinked with the growth of the Indian economy and the growth of infrastructure. The sector witnessed growth in the FY24 on account of increase in the construction activity in sectors, including urban development, rural sector, airports and ports, and an upswing in mining activity. As per Indian Construction Equipment Manufacturers Association (ICEMA), overall construction equipment sales volume grew by 26% y-o-y with 1,35,650 units in FY24 compared to 1,07,779 units in FY23. The growth was on account of rise in domestic sales by 24% y-o-y and 49% y-o-y growth in exports. Earthmoving, road construction equipment and material handling equipment saw a growth during the same period i.e. 21%, 40% and 61% respectively. Additionally, Material processing and concrete equipment registered a growth in sales, i.e. 8% and 19% respectively during same period.
The overall growth of the economy and the construction industry is driving a significant increase in the availability of both new and used construction equipment for purchase and sale. Rising infrastructure investments, urbanization, and industrial expansion have fuelled higher demand for construction machinery, prompting manufacturers to scale up production and enhance their distribution networks. Simultaneously, the growing secondary market for used equipment is benefiting from improved asset quality, better maintenance practices, and advancements in technology such as telematics and predictive maintenance. As a result, buyers now have greater access to a diverse range of equipment that meets various operational and budgetary requirements.
Pros and strengths
Largest player in export of Non-OEM construction equipment: The company is engaged in export trading of refurbished and new construction machines to international markets. It is the largest Non-OEM construction equipment exporter with a 6.9% market share. IT is recognized as Three-Star Export house by Directorate General of Foreign Trade (DGFT), Government of India with export of construction machines to over 30 countries, including UAE, Mexico, Netherlands, Belgium, South Africa, Australia, and UK etc.
Diversified market presence and optimized machines solutions: By offering a wide range of construction machines across global markets and segments, it reduces dependence on any single product category or region. This approach allows it to respond to industry changes and evolving customer needs. The company’s portfolio includes customized and accessorized machines from other brands, refurbished used machines, and newly launched equipment under its own brand. It supplies machines such as hydraulic excavators, motor graders, backhoe loaders, soil compactors, wheel loaders, bulldozers, cranes, and asphalt pavers. This diverse product range supports construction and infrastructure projects, helping meet operational needs and market demand while strengthening its resilience and growth potential.
Supply chain efficiency: The company has built an efficient supply chain infrastructure that supports its core business in the export trading of construction machines. Over the past three fiscal years, its procurement network comprised 228 suppliers, including 172 contractors, 51 traders, and 5 manufacturers. This diverse supplier base enables it to source a wide range of new and used construction machines in line with its customers’ requirements and market demand.
Launch and Expansion of HexL brand machines: The recent launch of HexL, the company’s brand, marks its transition from other brands’ product sales model to own brand, product-driven, customer centric business approach. Under this model, construction machines are being manufactured through contract manufacturing arrangement with third-party manufacturer. These machines are produced in accordance with its specifications, technical requirements, and quality standards. To maintain product consistency and ensure adherence to predefined parameters, it conducts regular quality checks through frequent visits to contract manufacturing facilities. This process enables it to monitor production, address any deviations from specifications, and uphold operational efficiency.
Risks and concerns
Maximum revenue comes from limited customers: The company’s business is dependent on a limited number of key customers. The company has garnered 75.06%, 98.76% and 97.75% of its total revenue from top 5 customers in FY25, FY24 and FY23 respectively. The concentration of revenue among a limited number of key customers exposes it to substantial risks, including revenue volatility, reduced negotiating leverage, and operational instability. A decline in demand from, or adverse developments related to, any of these customers, such as renegotiation of terms, reduction or cessation of orders, or delayed payments, could materially impact its financial condition, business operations, and cash flows.
Major portion of revenue comes from select geographies such as Mexico and UAE: A significant portion of its revenue is derived from select geographies such as Mexico and UAE. The company has garnered 83.03%, 88.80% and 31.05% of its total revenue from Mexico and UAE in FY25, FY24 and FY23 respectively. Any adverse economic, political, regulatory, or social developments in these countries could impact its business operations and financial performance. Given its concentration revenue in these countries, any adverse developments may lead to order cancellations, delayed payments, or customer attrition, all of which could significantly affect its cash flow, profitability, and future growth prospects.
Limited operating history: The company recently launched its brand, HexL, in December 2024 with an initial focus on backhoe loaders, which are manufactured under a contract manufacturing arrangement in China. The company has sold 40 HexL-branded backhoe loader machines. HexL has a limited operating history, which makes it challenging to assess its long-term commercial viability, customer acceptance, and ability to contribute meaningfully to its growth and profitability.
High working capital requirement: The company’s business requires substantial working capital to finance to fund the procurement, refurbishment, customization, inventory holding, and logistics for construction machines. Additionally, its working capital needs may increase if its contractual or sales terms do not include advance payments, or if payment is required upon delivery. Its working capital is funded through short-term borrowings and internal accruals. There can be no assurance that it will generate sufficient cash flows or be able to borrow funds on a timely basis, or at all, to meet its working capital and other requirements, or to pay its debt, which could materially and adversely affect its business and results of operations.
Outlook
Jinkushal Industries is an export trading company supplying construction machinery globally. Operating in over thirty countries -- including the UAE, Mexico, Netherlands, Belgium, South Africa, Australia, and the UK -- the company has built a strong reputation for quality, customisation, and service excellence. The company has diversified market presence and optimised machine solutions. It also has efficient supply chain infrastructure supporting its export trading of construction machines. On the concern side, the company’s revenue from operations is dependent upon a limited number of customers and the loss of any of these customers or loss of revenue from any of these customers could have a material adverse effect on its business, financial condition, results of operations and cash flows. Moreover, a significant portion of its revenue is derived from select geographies such as Mexico and UAE. Any adverse developments in this market could adversely affect its business.
The issue has been offering 95,99,548 shares in a price band of Rs 115-121 per equity share. The aggregate size of the offer is around Rs 110.39 crore to Rs 116.15 crore based on lower and upper price band respectively. Minimum application is to be made for 120 shares and in multiples thereon, thereafter. On performance front, the revenue from operations of the company for Fiscal Year 2025 was Rs 38,055.81 lakh against Rs 23,859.18 lakh for Fiscal Year 2024, an increase of 59.50%. Moreover, profit after tax for Fiscal Year 2025 was Rs 1,914.00 lakh against Rs 1,864.45 lakh in Fiscal Year 2024, an increase of 2.66%.
The company intends to place additional focus on its own brand and its branded product lines to enhance its control over production quality, cost efficiency and overall supply chain management. Engaging with contract manufacturers will allow it to ensure that all construction machines are produced in accordance with its predefined specifications, technical requirements and industry regulations. This structured approach will help maintain consistency in product quality, comply with safety and operational standards and provide customized solutions tailored to specific customer and market needs. Going forward, it aims to optimize operational efficiency, expand its market reach, and ensure continued growth in both domestic and international markets.
