- QIBs were the most aggressive bidders for the shares.
- It had raised ₹147 crore from anchor investors like HDFC Mutual Fund, Nippon India and more.
- The net proceeds from the offer will be utilised towards the expansion of its Nashik facility.
Qualified institutional buyers (QIBs) bid aggressively for the shares, with good interest from non-institutional investors as well.
The price band for the IPO was fixed at ₹418-441 per equity share. The company provides energy efficiency solutions, and supplies a wide range of electrical measurement and process optimization equipment to a variety of industries.
It had raised ₹147 crore from anchor investors like HDFC Mutual Fund, Nippon India Mutual Fund, Sundaram Mutual Fund, Tata Mutual Fund and more.
The net proceeds from the offer will be utilised towards the expansion of its Nashik facility. DAM Capital Advisors, Mirae Asset Capital Markets and Motilal Oswal Investment Advisors are the book running lead managers of the issue while KFin Technologies is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.
‘Listing gains to be tepid’
Most analysts believe that the IPO offers investors an opportunity to invest in a global leader in energy efficiency products, but believe that it’s expensively priced.
SBI Securities says that its valuations are stretched taking into consideration weak cash flows and low return ratios. “However, being a unique business, the business may command a scarcity premium and long-term investors are recommended to subscribe to the issue. Listing gains are likely to remain tepid,” it said.
Prashanth Tapse, research analyst and senior VP research at Mehta Equities said that the issue is asking for a marketcap of ₹1,674 crore with price to earnings ratio (P/E) of 33.69x on consolidated basis.
“It seems the issue is fully priced-in looking at growth and expected outlook. We are inclined to recommend risk taking investors to ‘Subscribe with Risk’,” Tapse added.
Arihant Capital however believes that Rishabh Instruments' IPO presents an opportunity to invest in a well-established company with a history of growth and innovation. “We are recommending ‘Subscribe for listing gains’ for this issue,” he said.
About the company
The company founded by Narendra Joharimal Goliya, has over 40 years of experience in the manufacturing and electrical industry. Its energy efficiency solutions include automation, metering and measurement, precision engineered products and others to industries like power, automotive and industrial sectors.
It engages in the design, development, manufacturing, and sale of devices under its own brand. It is a vertically integrated player involved in designing, developing, manufacturing and supplying electrical automation devices, control and protection devices; portable test and measuring instruments; and solar string inverters.
Through its subsidiary, Lumel Alucast, it manufactures and supplies high pressure die cast aluminium.
Apart from business, manufacturing risks and forex fluctuations owing to exports, the company cited environment and regulatory issues as risk factors that can affect its business. It is dependent on its Poland manufacturing facility II and in it manufactured over 58% of the total products in the last three years.
Its directors or key managerial personnel may have interests in the company other than reimbursement of expenses incurred or normal remuneration or benefits. Its promoter has provided a personal guarantee for a portion of its borrowings and if they are revoked it can affect its business.