Rolex Rings Limited opened with its initial public offering (IPO) on July 28. Thursday marks the second day of the IPO. The Day-1 activity was healthy as the public issue saw a good amount of participation from investors, especially the retail category. In total, the Rolex Rings IPO was subscribed 3.84 times by the end of the trading day on July 28, at approximately 17:00 IST, as per information on Chittorgarh. Reports also indicate that the breakup for the IPO was set as a subscription of 7.11 times from the retail category investors, while the Non-Institutional Investors (NIIs) subscribed 1.34 times to the issue in the same time frame. The Qualified Institutional Buyers (QIBs) put in bids for 3,312 equity shares against the reserved portion of 16.24 lakh equity shares.
Speaking of reserved portions, the investor portions were divided as follows – The QIB investor portion had a reservation of 50 per cent. The NII category had a 15 per cent reservation, and the Retail segment enjoyed a 35 per cent allocation for the issue. With that said, the retail investors were given a wide birth to apply for up to 13 lots at the upper end of the lot size. The upper end of the lot for the issue stood at Rs 187,200 as the minimal application amount at 208 shares. On the lower end of the spectrum, the lot size stood at 16 shares with Rs 14,400 standing as the minimum application amount.
The Rolex Rings IPO has a price band of Rs 880 to Rs 900 per equity share. Considering the Grey Market Premium (GMP) is Rs 460 on Thursday, this would suggest that the issue is trading at a premium of Rs 1,340 to Rs 1,360 per share on the grey market.
The automotive parts manufacturer is hoping to wrestle up funds worth Rs 731 crore through its issue. This consists of a Fresh Issue aggregating up to Rs 56 crore and an Offer for Sale (OFS) worth Rs 675 crore with 7,500,000 equity shares. The face value of this public issue is Rs 10 per equity share.
The Rolex Rings IPO is set to come to a close this Friday, July 30. After that, the leg work will start in August with the Basis of Allotment first on the chopping block. The Basis of Allotment is tentatively going to take place on August 4, while the refunds will be initiated on August 5. For the successful investor, their shares will be accredited to their Demat Accounts on August 6. The final listing date that will take this company public is set for August 9, 2021. The current promoters of this IPO are Rupesh Dayashankar Madeka, Jiten Dayashankar Madeka, Manesh Dayashankar Madeka, Pinakin Dayashankar Madeka, and Bhautik Dayashankar Madeka as per their draft red herring prospectus.
The company was incorporated in 2003 and stands to date, as one of the front-runners in India in terms of forging. Rolex Rings specialise in the manufacturing of hot rolled forged & machine bearing rings and automotive components that are used across segments i.e. passenger vehicles, 2-wheelers, commercial vehicles, electric vehicles, off-highway vehicles, industrial machinery, wind turbines and railways to name a few. The company offers a wide range of products such as automotive parts, hot forged and machined alloy steel bearing rings weighing from 0.01 Kg to 163+ kg caters. It offers these to various industries such as automotive, industrial infrastructure, railways and renewable energy. The company has a presence in 17 different countries including France, Italy, Germany, Thailand, Czech Republic, USA and India.
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Speaking on the outlook for the company, ICICI Direct Research, said in a note, “RRL serves 60 customers across 17 countries and is one of the key suppliers for leading bearing manufacturers. The company’s comprehensive product
portfolio catering to auto, industrial, infra & renewable segments and longstanding customer relationship gives credence to the quality and sustainability of RRL’s products. As the industrial segment picks up led by increased capex spend by public and private sector coupled with a recovery in auto sector, RRL should see strong traction from bearing manufacturers. The bearing clientele of RRL constitutes 80% of the total market. Hence, this ensures strong traction for RRL once the tide turns.”
Milan Desai, Lead Equity Analyst at Angel Broking said, “As for Rolex Rings Ltd, the revenues for most listed peers and the company have declined over the past four years but the company has generated better ROEs on account of better Asset Turnover. The company has a long-standing relationship with existing clients and the with newer products, it should be able to increase the share from existing customers. Based on the price band of Rs880-900, the company is seeking PE of 39x without considering the tax credit of Rs25 crores, which is reasonable given its strong return ratios. 55% of revenue comes from outside India and considering potential rebound in demand from user industries, we have a positive outlook on Rolex Rings Ltd IPO as well.”
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