Ratnaveer Precision Engineering IPO Open for Subscription: Should You Subscribe to the Issue?

Ratnaveer Precision Engineering’s initial public offering (IPO) valued at Rs. 165 crore opened for subscription on Monday 4th September. The three-day bidding process is scheduled to conclude on Wednesday, September 6th. The company is offering its shares in this range from Rs 93-98 per share in lot sizes of 150 shares and their multiples thereafter.

The offering involves a sale of 1.38 crore of fresh shares, while its promoter Vijay Ramanlal Sanghavi will sell 30.40 lakh shares via the offer-for-sale (OFS) route. The net proceeds from the offering are intended to be used to fund working capital needs and general corporate purposes. Prior to its IPO, Ratnaveer Precision Engineering raised Rs.49.5 crore after completing the allotment of 50,52,000 shares to six anchor investors at Rs.98 per share. Societe Generale, Sixteenth Street Asian Gems Fund, Saint Capital Fund, Coeus Global Opportunities Fund and Leading Light Fund VCC – The Triumph Fund contributed to the anchor book. Ratnaveer Precision Engineering, established in 2002, manufactures stainless steel sheet, washers, solar roof hooks, tubing and tubing. Ratnaveer Precision Engineering has four manufacturing facilities located in Vadodara and Ahmedabad, Gujarat. Brokerage firms are mostly positive on the stock and are proposing to bid on the issue, citing strong business fundamentals and associated valuations. However, some analysts are issuing a warning to investors, citing increasing competition from disorganized players as a key risk to the problem. “The company has demonstrated continued improvement in its revenue performance as well as an increase in its margins and EBITDA margins to 11.8 percent and 9.8 percent in FY23, respectively. Financially, ROE and ROCE rose to 29.1 percent and 12.6 percent, respectively. StoxBox said the issue was priced at 13 times earnings in fiscal 2023, while the debt-to-equity ratio rose to 2nd in fiscal 2023 .2-fold dropped listed peers. However, it should be noted that the company operates in a highly fragmented and competitive industry with low barriers to entry, making its ability to sustain this constant growth momentum a key factor to monitor,” it added with a Subscribe rating. added. Ratnaveer Precision Engineering manufactures stainless steel based products for automotive, solar power, wind power, power generation, oil & gas, pharmaceutical, plumbing & plumbing, instrumentation, electromechanical, architecture, building & construction, electrical appliance, transportation, kitchen appliances, chimney liners, etc. other industries. For the year ended 31 March 2023, Ratnaveer Precision Engineering reported a net profit of Rs.25.04 crore and sales of Rs.481.14 crore. The company had a net profit of Rs.9.48 crore and revenue of Rs.428.47 crore in the previous financial year 2021-22. There are no comparable companies with similar product profiles as RPEL. However, we have included the above companies to benchmark the valuation. The company’s higher-priced P/E multiple, adjusted for fully diluted post-IPO paid-up equity, is 19 times which appears fully priced in terms of its performance, Choice Broking said. “The company’s revenue and earnings have grown at a respectable pace and it has reported an operating margin in the single digits. As the market in which the company operates is fragmented and given its location, small and medium-sized, disorganized players dominate. The company has reserved half of the offering, or 50 percent of the shares, for qualified institutional bidders, while non-institutional investors will receive 15 percent of the allotment in the primary offering. The remaining 35 percent of the shares are reserved for the private investors in the issue. Unistone Capital is the sole manager of the issue while Link Intime India has been appointed as registrar for the issue. Shares in The company will be listed on both stock exchanges – BSE and NSE – with September 14th Thursday being the provisional listing date. Disclaimer: Under no circumstances should any person on this platform make trading decisions solely based on the information discussed herein. You should consult a qualified broker or other financial advisor before making any actual investment or trading decisions. All information is for educational and informational purposes only. Business Today makes no warranty, guarantee or endorsement for the Content and hereby disclaims all warranties, express or implied, related thereto.

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