Rolex Rings IPO Review 2021: The Rolex Rings IPO will be the sixth IPO to hit the Indian markets this month. The IPO will open from July 28th to July 30th. They aim to raise Rs. 731.00 crores through a public offering.
In this article, we look into important information on the Rolex Rings IPO and find out the possible prospects of the company.
Rolex Rings IPO Review – About the Company
Founded in 2003 Rolex Rings is one of the top five forging companies in India in terms of installed capacity. They manufacture hot rolled forged & machine bearing rings and automotive components.
These are used in vehicle segments (2-wheelers, commercial vehicles, off-highway vehicles), railways, electric vehicles, industrial machinery, wind turbines, etc.
The company is based in Rajkot Gujarat where it has 3 manufacturing plants with 22 forging lines. These give it an aggregate installed capacity of 1,44,750 MTPA and 69 million parts per annum in machining.
Rolex Rings supplied bearing rings and automotive components internationally across 17 countries last year. These include the likes of France, Italy, Germany, Thailand, Czech Republic, USA, etc. Exports accounted for 56.10% of its revenue.
Bearing rings make up 53.7% of its revenue and automotive components make up 38.5%. It is also important to note that despite having over 60 customers their top 10 customers accounted for 72.6% of its revenue.
Despite having many advantages the company’s financials have staggered in the recent past. Its revenues have declined in the last 4 years. However, Rolex Rings has improved its ROE.
The company made a profit of Rs. 86.95 crores for FY21 an increase from Rs52.94 crores the previous year.
In addition to that, they have also successfully reduced their debt from Rs. 385.10 crores to Rs. 250 crore over the last 3 years.
The company’s top listed competitors are
Grey Market Premium of Rolex Rings IPO
The shares of Rolex Rings were trading at around a 50% premium in the grey market before the IPO. The shares traded at a price of Rs. 1,350 giving them a premium of Rs. 450 over their issue price band of Rs 880-900 per share.
Rolex Rings IPO Review – Key IPO Information
The company’s promoters include Rupesh Dayashankar Madeka, Jiten Dayashankar Madeka, Manesh Dayashankar Madeka, Pinakin Dayashankar Madeka, and Bhautik Dayashankar Madeka. The issue includes an offer for sale of Rs. 750 crores by Rivendell PE.
The promoters have appointed Equirus Capital Private Ltd, IDBI Capital Markets & Securities Limited, JM Financial Limited as the lead managers to the issue. Link Intime India Pvt Ltd has been appointed as the registrar to the issue.
|IPO Size||₹731.00 Cr|
|Fresh Issue||₹56.00 Cr|
|Offer For Sale(OFS)||₹675.00 Cr|
|Opening Date||Jul 28, 2021|
|Closing Date||Jul 30, 2021|
|Face Value||₹10 per equity share|
|Price Band||₹880 to ₹900 per equity share|
|Lot Size||16 Shares|
|Minimum Lot Size||1|
|Maximum Lot Size||13|
|Listing Date||Aug 9, 2021|
Purpose of the Rolex Rings IPO
The proceeds from the IPO will be used for
- Funding long-term working capital requirements.
- General corporate purposes.
The IPO opens on 28th July and closes on 30th July 2021. For retail investors, it can be a good opportunity to look into the company’s future prospects and apply for the IPO if they believe in the products and growth prospects of Rolex Rings.
Despite the opportunities, investors must take into consideration that Rolex Rings has defaulted in the payment of loans in the past. The company had to go for Corporate Debt Restructuring (CDR) to restructure its debt in 2013.
In addition to that, the raw materials used by the company include different types of steel. Any change in prices could further have an impact on the company.
That’s all for this post. Do let us know what you think of the Rolex Rings IPO review. Are you planning to apply for this IPO or not? Comment below. Cheers!
Aron, Bachelors in Commerce from Mangalore University, entered the world of Equity research to explore his interests in financial markets. Outside of work, you can catch him binging on a show, supporting RCB, and dreaming of visiting Kasol soon. He also believes that eating kid’s ice-cream is the best way to teach them taxes.