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30 September 2023

Rishabh Instruments IPO: Powering Precision and Control

Introduction:

Rishabh Instruments Limited, incorporated in 1982, is a distinguished player in the field of manufacturing, design, and development of Test and Measuring Instruments and Industrial Control Products. This company is renowned for providing cost-effective solutions that measure, control, record, analyze, and optimize energy and processes across various industries.

IPO Overview:

Rishabh Instruments' IPO was a book-built issue with a total worth of Rs 490.78 crores. This issue was comprised of a fresh issue of 0.17 crore shares, amounting to Rs 75.00 crores, and an offer for sale of 0.94 crore shares worth Rs 415.78 crores. The bidding for the IPO opened on August 30, 2023, and closed on September 1, 2023. The allotment was finalized on September 6, 2023, and the shares were listed on both BSE and NSE on September 11, 2023. The price band for the IPO was set at ₹418 to ₹441 per share, with a minimum lot size of 34 shares requiring an investment of ₹14,994 for retail investors. High Net Worth Individuals (HNIs) could apply for a minimum of 14 lots (476 shares) for ₹209,916, and for bNII (bids above ₹10L), it was 67 lots (2,278 shares) amounting to ₹1,004,598.

Key Players:

The book running lead managers for the Rishabh Instruments IPO were Dam Capital Advisors Ltd (Formerly Idfc Securities Ltd), Motilal Oswal Investment Advisors Limited, and Mirae Asset Capital Markets (India) Private Limited. Kfin Technologies Limited acted as the registrar for the issue.

Stock Performance:

As of September 27, 2023, Rishabh Instruments Limited's stock (Arrow) was trading at ₹474.30, marking a 1.93% increase. The stock opened at ₹468.00, reached a high of ₹486.90, touched a low of ₹464.15, and had a previous closing price of ₹465.30. The total traded value amounted to 13,38,066 shares. In the past 52 weeks, the stock reached a high of ₹470.00 and a low of ₹432.35.

Ownership Structure:

Pre-issue shareholding stood at 80.67%, and post-issue, it was 70.68%.

Financial Performance:

Rishabh Instruments Limited exhibited robust financial performance. As of March 31, 2023, the company's assets were valued at ₹648.93 crores, while revenue amounted to ₹579.78 crores. Profits after tax remained steady at ₹49.69 crores. The net worth of the company stood at ₹408.75 crores, with reserves and surplus of ₹125.12 crores. The total borrowing as of that date was ₹102.85 crores.

Performance Indicators:

Key performance indicators for the Rishabh Instruments IPO included a post-issue P/E (Price-to-Earnings) ratio of 33.69 and a Market Capitalization of ₹1674.1 crores.

Objectives of the Issue:

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

1. Financing the cost towards the expansion of Nashik Manufacturing Facility.
2. General corporate purposes.

Expert Opinion:

Noted that Rishabh Instruments Limited is a global leader in energy efficiency solutions and precision engineering products. With over 66% of its revenues coming from exports, it has established a strong presence in the global market. Based on FY23 earnings, the issue seemed fully priced. Nevertheless, well-informed investors may consider investing for medium to long-term rewards.

Subscription Status:

The Rishabh Instruments IPO generated substantial interest, with a subscription rate of 31.65 times as of September 1, 2023. Retail investors displayed strong enthusiasm with a subscription rate of 8.44 times. The QIB (Qualified Institutional Buyers) category had an impressive subscription rate of 72.54 times, while the NII (Non-Institutional Investors) category had a rate of 31.29 times.

Conclusion:

Rishabh Instruments Limited has carved a niche for itself in the precision instruments and industrial control products sector, both domestically and internationally. The IPO reflects the company's ambitions for growth and expansion. However, potential investors should perform thorough due diligence, taking into consideration market dynamics and competitive forces in the industry before making investment decisions.

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