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15 October 2023

Ratnaveer Precision Engineering IPO: Forging a Path in Stainless Steel

Introduction:

Ratnaveer Precision Engineering Limited, established in 2002, specializes in the production of stainless steel finished sheets, washers, solar roofing hooks, pipes, and tubes. Their stainless steel products cater to diverse industries such as automotive, solar power, wind energy, power plants, oil & gas, pharmaceuticals, plumbing, instrumentation, architecture, and more. The company operates four manufacturing units in Gujarat, India.

IPO Snapshot:

The Ratnaveer Precision Engineering IPO is valued at ₹165.03 crores, consisting of a fresh issue of 1.38 crore shares worth ₹135.24 crores and an offer for sale of 0.3 crore shares totaling ₹29.79 crores. The IPO bidding period ran from September 4, 2023, to September 6, 2023. The allotment was completed on September 7, 2023, with shares listed on both the BSE and NSE on September 11, 2023. The IPO had a price band of ₹93 to ₹98 per share, with a minimum lot size of 150 shares, necessitating a minimum investment of ₹14,700 for retail investors. For Super Non-Institutional Investors (sNII), the minimum lot size was 14 lots (2,100 shares), amounting to ₹205,800, while for Big Non-Institutional Investors (bNII), it was 69 lots (10,350 shares), totaling ₹1,014,300.

Key Players:

Unistone Capital Pvt Ltd served as the book running lead manager of the Ratnaveer Precision Engineering IPO, and Link Intime India Private Ltd acted as the registrar for the issue.

Stock Performance:

As of September 27, 2023, Ratnaveer Precision Engineering Limited's stock (Arrow) was trading at ₹116.15, reflecting a 1.49% increase. The stock opened at ₹114.20, reached a high of ₹120.70, touched a low of ₹111.00, and had a previous closing price of ₹114.45. The total traded value amounted to 12,56,551 shares. The 52-week high and low were ₹129.35 and ₹112.15, respectively.

Ownership Structure:

Pre-issue shareholding stood at 86.3%, while post-issue, it was 55.48%.

Financial Performance:

Ratnaveer Precision Engineering has displayed strong financial growth. As of March 31, 2023, the company's assets were valued at ₹389.05 crores, with revenue amounting to ₹481.14 crores. Profits after tax reached ₹25.04 crores, and the net worth of the company stood at ₹106.05 crores, with reserves and surplus of ₹71.16 crores. The total borrowing as of that date was ₹229.99 crores.

Performance Indicators:

Key performance indicators for the Ratnaveer Precision Engineering IPO included a post-issue P/E (Price-to-Earnings) ratio of 18.99 and a Market Capitalization of ₹475.29 crores.

Objectives of the Issue:

The net proceeds from the IPO were allocated for the following purposes:

1. Funding the working capital requirements of the company.
2. General corporate purposes.

Expert Opinion:

Noted that Ratnaveer Precision Engineering Limited has made significant strides in stainless steel products, particularly in high-margin segments. The company has demonstrated growth in both its top and bottom lines. Based on FY23 earnings, he opined that the issue appears to be fully priced, and investors may consider it for medium to long-term rewards.

Subscription Status:

The Ratnaveer Precision Engineering IPO garnered substantial interest, with a subscription rate of 93.99 times as of September 6, 2023. Retail investors displayed strong participation with a subscription rate of 54.00 times. The Qualified Institutional Buyers (QIB) category saw robust demand, while the Non-Institutional Investors (NII) category exhibited significant interest with a subscription rate of 135.21 times. This included both bids above ₹10 lakhs (bNII) and bids below ₹10 lakhs (sNII), with subscription rates of 130.63 times and 144.37 times, respectively.

Conclusion:

Ratnaveer Precision Engineering Limited's specialization in stainless steel products and its strong financial performance make it an attractive proposition for investors. The IPO provides an opportunity to tap into the stainless steel industry's potential, particularly in high-margin segments. However, as with any investment, thorough research and assessment of one's investment horizon and risk tolerance are advised.

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