Ratnaveer Precision Engineering stock ends the day with 37% listing gains

• The stock debuted at ₹128 as compared to its IPO price of ₹98 per share.
• Its marketcap is at ₹630 crore, as per BSE.
• The issue received stellar response from non-institutional investors and QIBs who subscribed to the issue by over 130x each.

The stock of Ratnaveer Precision Engineering made its market debut at ₹128 on the bourses on Monday — with a 30% premium over its IPO price of ₹98 per share. It gained 5% more during the day, ending with listing gains of 37%.

However, it fell short of the grey market’s expectations of 51% listing gains.

Its marketcap is at ₹651 crore, as per BSE.

The ₹165 crore initial public offer (IPO) was subscribed almost 94 times the shares on offer, as on the last day of the issue.

Non-institutional investors and qualified institutional buyers (QIBs) subscribed to the issue by over 130 times each while the retail investor portion was subscribed by 53.96 times.

Here are the listing gains of the last six market debuts

The issue is a combination of fresh issue of 13,800,000 shares and offer-for-sale (OFS) of 3,040,000 shares, where the seller is the promoter Vijay Ramanlal Sanghavi.

The net proceeds from the fresh issue will be used towards funding working capital requirements of the company, and towards general corporate purposes.

The stainless steel product manufacturer focused on producing finished sheets, washers, solar roofing hooks, pipes and tubes.

It has four manufacturing units, out of which two units are located at GIDC, Savli, Vadodara, Gujarat, one at Waghodia, Vadodara, Gujarat and the other one is located at GIDC, Vatva, Ahmedabad, Gujarat.

The company’s total income has been growing gradually in the last three years, but its net profit has grown 2.7 times in FY23 as compared to the year before.

Lack of long-term agreements with suppliers, price volatility in the steel sector; in addition to the high-volume-low-margin and the working capital intensive nature of the business have been listed at business risks of the company, in the RHP.

It has experienced negative cash flows in relation to its operating, investing and financing activities in the last three financial years.

A major portion of its public shareholding is held by shareholders who are extended family members of the promoter. “After the successful completion of the offer, these shareholders shall have the ability to influence the outcome of matters that are submitted to public shareholders for their approval,” the company said in its RHP.