Ratnaveer Precision Engineering, a leading stainless steel product manufacturer, is all set to kickstart the IPO season in September 2023. Here’s an in-depth look at the 10 vital aspects you should know before considering your investment.
Key Highlights of Ratnaveer Precision Engineering IPO
· Ratnaveer Precision Engineering IPO opens from September 4 to September 6, 2023.
· The offer price is set at Rs 93-98 per share, with a market cap of Rs 475.3 crore.
· The company aims to raise Rs 165.03 crore for working capital and general purposes.
· Retail investors of the market can bid for a minimum of 150 shares, with a maximum investment of Rs 2 lakh.
· Strong financial performance, with a 164.3% profit increase in FY23 and improved ratios.
· Company leadership: Vijay Ramanlal Sanghavi holds an 86.3% stake with a robust management team.
Ratnaveer Precision Engineering IPO- Exploring the Company Profile
Ratnaveer Precision Engineering, boasting four manufacturing units in Gujarat, specialises in the production of finished sheets, washers, solar roofing hooks, pipes, and tubes, all made from stainless steel. These high-quality products cater to a diverse range of industries, including automotive, power, oil and gas, pharmaceuticals, electromechanics, building & construction, electrical appliances, and kitchen appliances.
Objectives of the Issue
The net proceeds from the fresh issue, amounting to Rs 85 crore, will be channelled towards working capital requirements, with the OFS proceeds going to the selling shareholders.
Ratnaveer Precision Engineering IPO Details
The book-built offer opens for subscription on September 4, 2023, and closes on September 6, 2023.
Price Band Details
The offer price has been firmly set at Rs 93-98 per share, resulting in a market capitalisation of Rs 475.3 crore at the upper price band.
Issue Size of Ratnaveer Precision Engineering IPO
Ratnaveer Precision Engineering aims to raise Rs 165.03 crore through its maiden public issue, which includes a fresh issue of 1.38 crore equity shares, amounting to Rs 135.24 crore, and an offer-for-sale (OFS) of 30.4 lakh shares, valued at Rs 29.79 crore, by promoter Vijay Ramanlal Sanghavi.
Retail investors can bid for a minimum of 150 equity shares, with subsequent bids in multiples of 150 shares. The minimum investment for a single lot of 150 shares is Rs 14,700, and the maximum permissible investment stands at Rs 1,91,100 for 13 lots (1,950 shares) at the upper price band. Retail investors are permitted to invest up to Rs 2 lakh in the Ratnaveer Precision Engineering IPO.
Ratnaveer IPO Offer Allocation
The offer size has been thoughtfully allocated, with 50% reserved for qualified institutional buyers (QIBs), 15% for high-net-worth individuals (HNIs), and the remaining 35% earmarked for retail investors.
The company’s financial performance has been truly impressive over the years. In the fiscal year 2023 (FY23), it experienced a remarkable surge in net profit, which skyrocketed by a staggering 164.3% to reach a substantial Rs 25 crore. This remarkable growth can be attributed to the company’s robust operational performance. In the same period, the EBITDA (earnings before interest, tax, depreciation, and amortisation) witnessed an astounding year-on-year increase of 65.7%, reaching Rs 45.6 crore. Notably, the company achieved an impressive margin expansion of 306 basis points, culminating in a noteworthy 9.51% margin compared to the previous fiscal year (FY22).
Promoters and Management
Vijay Ramanlal Sanghavi, the Chairman & Managing Director, along with his wife, Seema Vijay Sanghavi, who are promoters, hold a substantial 86.3% stake in the company. The remaining shareholding is held by public shareholders, predominantly other family members. The company’s board comprises key members, including Babulal Sohanlal Chaplot (Wholetime Director), Binita Verdia (Non-Executive Non-Independent Director), Ankita Dineshbhai Soni, Bharatkumar Kanchanlal Shah, and Sreeram Vishwanathan Rishinaradamangalam as independent directors. Prerana Rajeshbhai Trivedi serves as the Company Secretary and Compliance Officer, while Nanubhai Panchal is the Chief Operating Officer.
What Does This Latest IPO Mean for Indian Investors: Exploring the Risk Factors
It’s essential to consider the following risk factors before making an informed investment decision:
a) The steel industry’s pricing is susceptible to market demand, volatility, and economic conditions. Fluctuations in steel prices may adversely impact the business.
b) The company relies heavily on a few major customers for a substantial portion of its revenues.
c) A substantial portion of its domestic sales comes from the western and northern zones, making it vulnerable to adverse developments in these markets.
d) The company’s business demands significant working capital.
e) Operating in a high-volume, low-margin industry, the company is susceptible to sudden price movements and anomalies that could affect profitability.
f) Negative cash flows have been experienced in relation to operating, investing, and financing activities in the last three financial years. Future negative cash flows could impact operations and financial conditions.
g) The company operates in a highly competitive and fragmented industry with low entry barriers.
How Can You Invest?
Listing Date and GMP
Ratnaveer Precision Engineering, in consultation with the NSE, plans to finalise the basis of allotment for IPO shares by September 11.
- Equity shares will be transferred to successful investors’ demat accounts by September 13.
- Refunds for unsuccessful participants will be credited to bank accounts by September 12.
- Trading in Ratnaveer Precision Engineering’s equity shares will commence on the BSE and NSE starting September 14, in accordance with the IPO schedule.
Notably, the company’s shares were reportedly trading at around a 50% premium in the grey market over the upper price band, as per analysts’ insights provided on the condition of anonymity.
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Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.