Company and IPO Overview:
Ratnaveer Precision Engineering Limited, incorporated in 2002, produces stainless steel finished sheets, washers, solar roofing hooks, pipes, and tubes. Ratnaveer manufactures stainless steel-based products for automotive, solar power, wind energy, power plants, oil & gas, pharmaceuticals, sanitary & plumbing, instrumentation, electromechanics, architecture, building & construction, electrical appliances, transportation, kitchen appliances, chimney liners, and other industries. These products cater to both commercial and residential sectors and are marketed within India and overseas.
The company operates across four manufacturing units. Two units (Unit-I and Unit-II) are situated at GIDC, Savli, Vadodara, Gujarat. Another unit (Unit-III) is located at Waghodia, Vadodara, Gujarat, while the fourth unit (Unit-IV) is based at GIDC, Vatva, Ahmedabad, Gujarat.
At Unit I of Ratnaveer Precision Engineering, they produce SS finishing sheets, SS washers, and SS solar mounting hooks. Meanwhile, Unit II focuses on manufacturing SS pipes and tubes. Unit III and Unit IV play crucial roles in the company's backward integration process. Specifically, Unit III is responsible for melting steel scrap to create steel ingots, and Unit IV handles the rolling process, converting flat ingots into SS sheets. These sheets serve as the foundational material for the production of SS washers.
Ratnaveer intends to expand its portfolio of SS washers by adding circlips to the product line, it currently offers over 2,500 SKUs of SS washers including inner ring washers, spring washers, nord lock washers, retaining rings, internal tooth washers and external tooth washers of different sizes and specifications.
Ratnaveer Precision Engineering IPO is the next main board IPO which is ready to set its footprints in the stock market and the company is about to raise around ₹ 165.03 crores via IPO comprising Fresh Issue of ₹ 135.24 crores and Offer For Sale upto ₹ 29.79 crores. The price band of the issue is ₹ 93 to ₹ 98 with a minimum market lot of 150 shares. Ratnaveer Precision Engineering IPO subscription quota for retail is 35.00%, NII is 15.00% and QIB is 50.00%.
Financials (rounded off):
Date | Total Revenue (₹ in cr) | PAT (₹ in cr) |
31/03/2021 | 364 | 5 |
31/03/2022 | 428 | 9 |
31/03/2023 | 481 | 25 |
Objectives of the Issue:
1. Financing the company’s working capital requirements.
2. General corporate purposes.
IPO Details:
IPO Date | 04/09/2023-06/09/2023 |
Face Value | ₹10 per share |
IPO Price Band | ₹93-₹98 per share |
IPO Lot Size | 150 Shares |
Listing at | NSE, BSE |
Basis of Allotment | 11/09/2023 |
Credit of Shares in Demat | 13/09/2023 |
Listing Date | 14/09/2023 |
Pre-Issue Shareholding | 86.3% |
Post-Issue Shareholding | 55.48% |
Retail Minimum Lot Size | 150 shares (₹14,700) |
Valuations & Margins:
Indicators | FY 21 | FY 22 | FY 23 |
EPS | 1.59 | 2.75 | 7.26 |
P/E | - | - | 13.5 |
EBITDA (%) | 6.76 | 6.81 | 9.8 |
Debt/Equity | 2.67 | 2.89 | 2.17 |
ROCE (%) | 10.33 | 9.67 | 12.62 |
Important things to note about the Company:
Top reasons to consider the IPO:
1. Ratnaveer Precision Engineering has developed a system of backward integration wherein, it processes the waste generated from manufacturing and converts it back to raw material used in manufacturing.
2. Ratnaveer Precision Engineering has a wide diversified product portfolio which enables it to meet the trends and changing demands of its customers. It also gives it an edge to efficiently compete with our competitors.
3. Ratnaveer Precision Engineering has a diverse customer base in domestic as well as international markets. In the domestic market, it sells its products to manufacturers, traders and end users. In the international markets, it supplies its products to traders.
4. Ratnaveer Precision Engineering has an in-house R&D facility wherein it develops tools and molds for its products which help it enhance its product offerings.
5. Ratnaveer Precision Engineering has developed quality control processes for inspecting the raw materials as well as the final products that ensure the production of quality products that help it enhance its brand value.
Risk Factors to watch out in the IPO:
1. Ratnaveer does not have any long-term agreements with its raw material suppliers. An inability to procure the desired raw materials in a timely manner and at a reasonable cost, or at all, can have a negative impact on its business.
2. Steel pricing is affected by international market demand, volatility, and economic factors. Steel price fluctuations may have an adverse impact on the company.
3. A majority portion of the total revenue is attained from the top 10 customers of the company. Additionally, the company does not enter into any long-term contracts with its customers and any failure to continue the existing arrangements could adversely affect its business.
4. Ratnaveer Precision Engineering requires huge working capital requirements to run its operations. The inability to meet the cash flow requirements can have a negative impact on its operations.
5. Ratnaveer Precision Engineering operates in a highly competitive and fragmented industry with low barriers to entry and may be unable to compete successfully against existing or new competitors from the organized and unorganized.
Crisp Insights:
Ratnaveer Precision Engineering IPO GMP Today: The Company is commanding a GMP of around Rs.50.
Ratnaveer Precision Engineering IPO Review: Listing gains likely as per GMP data.
Ratnaveer Precision Engineering GMP is strong and hence, investors can look to invest for listing as well as long term gains.
Disclaimer: All information is provided for educational and informational purpose only. Data is fetched from publicly available sources such as the DRHP filed by the company. The website or the author takes no guarantee for the accuracy of the data however, we have tried our best to present accurate data to out readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.
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