Rashi Peripherals closes 3% ahead of issue price on debut day

• The stock closed at ₹320 on Wednesday as compared to listing price of ₹311.
• The company’s market cap is at ₹2,207 crore as per Bombay Stock Exchange.
• The grey market was expecting 19% listing gains from the stock.

Hardware distribution major Rashi Peripherals debuted on the bourses with a 7.7% premium on early Wednesday. But it pared some of its gains during the day, to close 3% ahead of its issue price.

The stock closed at ₹320 as compared to its listing price of ₹311. The company’s market cap is at ₹2,207 crore as per Bombay Stock Exchange. It disappointed the grey market which was expecting 19% listing gains from the stock.

The ₹600 crore issue was subscribed 62 times the shares on offer. It raised ₹180 crore from anchor investors like ICICI Prudential, Aditya Birla Sun Life Insurance, SBI General Insurance and more; ahead of opening the issue to the public.

The listing performance of 2024’s market debuts have been mixed due volatile market conditions. However, the last two listings like BLS E-Services and Nova Agritech have provided good gains to investors.

Here are the listing gains of the last few market debuts

Its initial public offer is entirely a fresh issue, using which it intends to pay off loans, towards working capital and general corporate purposes.

The Mumbai-based company distributes over 10,500 types of tech products. It has branches in 50 cities that operate as sales and service centres and warehouses. They cover 680 locations across 28 states and union territories in India through an ecosystem of 8,407 customers, as of September 30, 2023. It’s also the distribution partner of 52 global brands including Dell, Asus, HP, Logitech and more.

With a wide footprint as well as a wide product range, Rashi has been able to garner a chunky market share as a pan-India distributor of technology products. It has over 45% market share in processors, graphics cards and pen drives; over 20% market share in routers (33%), hard drivers, keyboards and mice, monitors; and over 10% share in UPS, laptops, desktops and switches.

Its revenue from operations grew by 57% in FY23, and profit by 35%. But it raked up debt to the tune of ₹1,275 crore, as of September 2022, including unsecured loans to the tune of ₹19 crore from promoters and members of promoter group and others.

The IPO proceeds can help cushion some of it, believe analysts. “Utilization of IPO proceeds would lower the financial liabilities, whereas availability of working capital would boost the business expansion capabilities in the medium-term,” says Choice Broking.