Rolex Rings IPO opens today: Should you subscribe?
Premium- Rolex Rings raised ₹219 crore from 26 anchor investors ahead of its IPO
- The price band for the initial share sale fixed at ₹880-900 per share
Rolex Rings Limited ₹731 crore initial public offer (IPO) will open for subscription today and will close on Friday i.e., July 30. The price band for the initial share sale is fixed at ₹880-900 per share. The issue will comprise a fresh issue of ₹56 crore and an offer-for-sale (OFS) of up to 75 lakh equity shares by Rivendell PE LLC (formerly known as NSR-PE Mauritius LLC).
The automotive components manufacturer raised ₹219 crore from 26 anchor investors ahead of its IPO. The anchor investors include ITPL – Invesco, Matthews Asia, HSBC Global Investment. In addition, HDFC Trustee Company Ltd, ICICI Prudential, Axis Mutual Fund, Kotak Mahindra Life Insurance and Nippon Life India Trustee were other investors invested in the anchor book bidding.
As per market observers, Rolex Rings grey market premium (GMP) was at around ₹440. The grey market is an unofficial platform, wherein trading starts after the announcement of IPO price band till the listing of IPO shares.
Equirus Capital Private Limited, IDBI Capital Markets & Securities Limited, and JM Financial Limited are the book running lead managers to the issue. Link Intime India Pvt Ltd is the registrar to the issue.
50% of the offer will be reserved for Qualified Institutional Buyers (QIBs), 35% for retail investors and the remaining 15% for Non-Institutional Investors (NIIs). Proceeds from the fresh issue would be used towards funding long-term working capital requirements as well as general corporate purposes. The basis of allotment of IPO shares is likely to take place on August 4 while the company may list on the stock exchanges on August 9.
'Glaring at the performance of company, the growth seems to be missing as revenue from operations remained at ₹6163.32 million in FY 2020-21 from ₹9043 million in FY 2019,'' said Abhay Doshi, Founder, UnlistedArena.com, dealing in Pre-IPO & Unlisted Shares.
As per RHP the company had defaulted in payment of certain loans in the past, and had approached CDR Cell for restructuring debt in FY13. The raw materials used by company pre-dominantly includes carbon steel, alloy steel and stainless steel, the price of which has been volatile in the past which could affect their operating margins, he said. ''At the price of ₹900, the asking PE comes at 24x. High sentiment in primary markets may emnate in listing gains but for long term it would be worthy to watch for future performance and take any decision,'' Doshi added.
Rolex Rings is a leading forging companies in India in terms of installed capacity and a manufacturer and global supplier of hot rolled forged and machined bearing rings, and automotive components.
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''For Rolex Rings, the revenues for most listed peers and the company have declined over the past four years but the company has generated better ROEs on account of better Asset Turnover. The company has a long-standing relationship with existing clients and the with newer products, it should be able to increase the share from existing customers.. Considering potential rebound in demand from user industries, we have a positive outlook on Rolex Rings IPO,'' said Milan Desai, Lead Equity Analyst, Angel Broking.
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