Rajputana Stainless IPO Day 2: The initial public offering of Rajputana Stainless Ltd, which produces various long and flat stainless-steel products, was 30% subscribed on its first day of bidding on Monday.
Rajputana Stainless secured ₹10 crore from anchor investor Shine Star Build Cap.
The company produces a wide array of stainless-steel items, such as billets, forging ingots, rolled black bars, rolled bright bars, flats, patti, and other related products.
In the Rajputana Stainless IPO, up to 50% of the shares in the public offering have been allocated for qualified institutional buyers (QIB), 15% for non-institutional investors (NII), and 35% of the offering is designated for retail investors.
Provisional allotment of shares for the Rajputana Stainless IPO is set to be determined on Thursday, March 12. Refunds will be processed by the company on Friday, March 13, and the shares will be deposited into the demat accounts of the allottees on that same day after the refunds. The shares of Rajputana Stainless are expected to be listed on the BSE and NSE on Monday, March 16.
Rajputana Stainless IPO GMP today
Rajputana Stainless IPO GMP today is +1.5. Considering the upper end of the IPO price band and the current premium in the gray market, the estimated listing price of Rajputana Stainless shares is indicated as ₹123.5 apiece, which is 1.23% higher than the IPO price of ₹122.
According to the gray market activities observed in the last 11 sessions, today’s IPO GMP is showing an upward trend and is anticipated to have a robust listing. The minimum GMP recorded is ₹0.00, while the maximum GMP noted is ₹2.50, as per experts.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Rajputana Stainless IPO details
Rajputana Stainless IPO includes a fresh issue of as much as 1.46 crore equity shares, in addition to an offer-for-sale of up to 62.5 lakh shares from promoter Shankarlal Deepchand Mehta. This results in a total capital raising of ₹255 crore at the highest end of the price range.
The proceeds from the new issue will be used to set up a manufacturing facility in the Panchmahal district of Gujarat, expand the product line, reduce debt, and cover general corporate expenses.
Rajputana Stainless IPO review
Adroit Financial emphasizes that the company manufactures a broad range of long and flat stainless-steel products, including billets, forging ingots, rolled black and bright bars, and wire rods, all available in more than 80 different grades. This variety lessens the company’s reliance on any single product, effectively mitigating risks to its revenue across various industrial sectors.
Regarding valuation, the issue is priced at a P/E ratio of 20.9 times (based on the upper price band), and it is recommended to Subscribe, taking into account the growth potential and the valuations.
GEPL Capital underscores that the company’s integrated facility allows for adaptable production, enabling it to either convert billets into long and flat stainless-steel products or sell billets separately based on market needs. Regarding valuation, based on earnings projections for FY25 and compared to the company’s paid-up capital, the issue is priced at a P/E ratio of 21 times. This issue is considered fairly valued when compared to its competitors, given its strong financial performance, plans for forward integration, and efforts to lower debt levels. As a result, a Subscribe rating is recommended for the issue.
SBI Securities points out that the company intends to enter the manufacturing of stainless-steel seamless pipes by utilizing part of the undeveloped land at its current facility. This move will represent a case of forward integration for the company, along with diversifying its product offerings.
The primary raw material needed for producing stainless-steel seamless pipes is rolled bars, which the company currently produces at its existing site.
Regarding valuation, at the upper limit of the price band at ₹122, the offering is assessed at a P/E ratio of 25.6x and an EV/EBITDA multiple of 12.6 times on a post-issue basis. Considering RSL’s superior profitability compared to its competitors, the valuation seems quite appealing. It is advisable to Subscribe for those looking at a long-term investment.
Rajputana Stainless IPO subscription status
Rajputana Stainless IPO subscription status was 30% on day 1. The retail portion is subscribed 4%, and NII portion has been booked 65%, Qualified Institutional Buyers (QIBs) portion received 99% bids.
The company has received bids for 63,04,540 shares against 2,09,00,000 shares on offer, at 17:00 IST, according to data on BSE.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
