The initial public offering (IPO) of Ratnaveer Precision Engineering, valued at Rs 165 crore, garnered a robust response from investors during the first few hours of bidding on its opening day, with a particularly strong showing from retail and non-institutional investors. The IPO officially began its bidding process on Monday, September 4.
Ratnaveer Precision Engineering is offering its shares in the price range of Rs 93 to Rs 98 per share over a three-day bidding period, with a minimum bid size of 150 equity shares and multiples thereof. The IPO comprises the sale of 1.38 crore fresh equity shares, while its promoter, Vijay Ramanlal Sanghavi, will offload 30.40 lakh equity shares through the offer-for-sale route.
Data indicates that investors submitted bids for 2,57,13,150 equity shares, representing a subscription of 2.18 times the 1,17,88,000 equity shares available for subscription as of 12:45 pm on Monday, September 4. The IPO bidding will conclude on Wednesday, September 6, 2023.
The retail investor category witnessed a subscription of 3.31 times, while non-institutional bidders subscribed 2.45 times. However, the qualified institutional bidders (QIBs) category did not meet the subscription expectations by the same time.
Ratnaveer Precision Engineering, established in 2002, specializes in the manufacture of stainless steel finished sheets, washers, solar roofing hooks, pipes, and tubes. The company operates four manufacturing units in Vadodara and Ahmedabad, Gujarat.
Before its IPO, Ratnaveer Precision Engineering raised Rs 49.5 crore by allocating 50,52,000 equity shares to six anchor investors at a price of Rs 98 per share. The anchor investors included Societe Generale, Sixteenth Street Asian Gems Fund, Saint Capital Fund, Coeus Global Opportunities Fund, and Leading Light Fund VCC – The Triumph Fund.
Brokerage firms generally view the stock positively and recommend bidding for the IPO due to its strong business fundamentals and reasonable valuations. However, some analysts have raised concerns about increasing competition from unorganized players as a potential risk for the IPO.
Ratnaveer Precision Engineering is known for its wide range of stainless steel products and various designs. The company’s backward-integrated business model provides control over the supply chain, and it also has a research and development (R&D) setup for new product development.
Nevertheless, the steel industry is susceptible to market volatility and economic conditions, and it faces stiff competition. The company’s high debt-to-equity ratio and low-margin business are among the investor concerns. However, the IPO is priced fairly with a price-to-earnings (P/E) valuation of 13.49 times, earning a ‘subscribe for listing gains’ rating.
The IPO has allocated 50% of its shares to qualified institutional bidders, with non-institutional investors receiving 15%, and the remaining 35% reserved for retail investors.
With a robust backward-integrated business model, a diverse product portfolio, a strong customer base, and a unique position in the stainless steel finishing industry, Ratnaveer Precision Engineering stands out. However, the company’s revenue growth has lagged behind its peers at an 18% CAGR, a point noted by Hensex Securities, which maintains a ‘neutral’ stance on the issue.
Unistone Capital is the sole manager of the IPO, while Link Intime India has been appointed as the registrar. The shares of the company are expected to be listed on both the BSE and NSE, with a tentative listing date of September 14, 2023.
**Ratnaveer IPO Key Details:**
1. IPO Price Range: Rs 93 to Rs 98 per share.
2. IPO Size: Rs 165.03 crore.
3. Minimum Bid Size: 150 shares.
4. Opening Date: September 4, 2023.
5. Closing Date: September 6, 2023.
6. Allotment Date: September 11, 2023.
7. Listing Date: Expected on September 14, 2023.
8. IPO Registrar: Link Intime India Private Ltd.
9. Grey Market Premium (GMP): Rs 50 per share.
10. Recommendation: ‘Subscribe for listing gains,’ with a P/E valuation of 13.49 times.
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