Ratnaveer Precision Engineering Limited plans to launch its IPO on September 4, 2023 with the subscription period beginning. As a prominent player in the stainless steel manufacturing industry, Ratnaveer Precision Engineering’s IPO has received significant attention from investors. In this comprehensive article, Latnavian IPOkey dates, key company information, positive and negative factors, and comprehensive reviews to help you make informed investment decisions.
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Ratnaveer Precision Engineering IPO Details
| IPO start date | September 4, 23 |
| IPO deadline | September 6, 23 |
| IPO Listing Date | September 14, 23 |
| Kind of problem | Book Built Issue IPO |
| face value | 10 rupees per share |
| IPO price range | Rs.93 to Rs.98 per share |
| lot size | 150 shares |
| Minimum order quantity | 150 shares |
| exhibition place | BSE and NSE |
| total issue size | Rs.16.503 billion |
| Latest issue | Rs.13.524 billion |
| OFS | Rs.29.79 billion |
Ratnaveer Precision IPO Schedule
| IPO start date | September 4, 23 |
| IPO closes on | September 6, 23 |
| Basis for allocation | September 11, 23 |
| Initiate refund | September 12, 2023 |
| Credit of shares to Demat | September 13, 2023 |
| Listing date | September 14, 23 |
| UPI Obligation Verification Deadline Time | September 6, 23 |
About Ratnaveer Precision Engineering Ltd
Ratnaveer Precision Engineering Limited was established in 2002 and specializes in manufacturing stainless steel finishing sheets, washers, solar roof hooks, pipes and tubes. With a diverse customer base across industries such as automotive, photovoltaics, power plants, and pharmaceuticals, the company has established a significant presence in the stainless steel products sector.
The company operates four manufacturing units, Unit I and Unit II are located at GIDC, Sabri, Vadodara, Gujarat, and specialize in the production of SS finishing sheets, washers and solar mounting hooks. Unit III, located in Wagodia, Vadodara, is responsible for the steel melting process, which turns steel scrap into ingots, while Unit IV, located at GIDC, Vatva, Ahmedabad, is responsible for rolling flat ingots into SS sheets, which are raw materials for SS washers. Emphasis on
Ratnaveer Precision Engineering is ready to expand its product line with the introduction of circlips and has set aside land for this purpose.
Ratnaveer Precision Engineering Ltd Finance
The company’s financial highlights include:
| Fiscal year end/end (amounts in billions) | |||
| detail | 21st year | 22nd year | 23rd year |
|---|---|---|---|
| assets | 255.9 | 308.6 | 389.1 |
| Earnings | 364.1 | 428.5 | 481.1 |
| Profit after tax | 5.5 | 9.5 | 25.0 |
| Profit % | 1.50% | 2.21% | 5.20% |
| net worth | 56.6 | 66.0 | 106.1 |
| Borrowing amount | 150.8 | 190.7 | 230.0 |
| reserves and surplus | 52.3 | 61.7 | 71.2 |
subject of the problem
This stock includes OFS and the funds will be used to sell the stock to shareholders and the new stock. Net proceeds from new issuance will be used for the following purposes:
- Working capital requirements: To ensure adequate liquidity for the company’s day-to-day operations.
- General corporate purposes: To meet various business needs and explore growth opportunities.
Ratnaveer Precision IPO Valuation
Ratnaveer Precision Engineering’s IPO price range is set at 93 ₹ to 98 ₹ per share. Adding up the valuations would look like this:
- FY2023 EPS: 2023 EPS is ₹7.26 and PER is about 12.8x (98/7.26).
- Weighted EPS over the last three years: Taking into account the weighted average EPS over the last three years (₹ 4.81), the PER is around 20.4x (98/4.81).
Comparing these ratios to peers provides valuable context.
- Industry PER average: The industry average PER is about 34.4 times.
- Peer comparison: With publicly traded peers such as Venus Pipes and Tubes trading at 60x (up to) and MM Forgings trading at 20x P/E, the company’s 13x to 20x IPO price is attractive. It looks like there is.
Ratnaveer Precision Engineering IPO – a positive factor
- Diverse customer base: The company serves a wide range of industries, reducing its reliance on a single sector.
- Significant revenue growth: Ratnaveer Precision Engineering shows consistent revenue growth, demonstrating a strong position in the market.
- Committed to innovation: The company’s expansion efforts, including the introduction of Circlip, demonstrate the company’s forward-looking approach.
Ratnaveer Precision Engineering IPO – Risk Factors
- Procurement of raw materials: Lack of long-term contracts with suppliers for raw materials can affect production.
- Fluctuations in steel prices: The company is sensitive to steel price fluctuations, which can affect profitability.
- Dependence on local markets: The majority of our domestic sales come from certain geographies, which could pose risks in the event of adverse circumstances.
- Working capital strength: The company’s high-volume, low-margin business model makes it vulnerable to cash flow challenges.
- Competitive environment: The industry has low barriers to entry and competition from new entrants can affect market share.
- Transactions between related parties: Transactions with past and potential related parties may raise concerns about conflicts of interest.
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Ratnaveer Precision Engineering IPO Review – Should You Apply or Not?
Ratnaveer Precision Engineering’s IPO brings both opportunities and challenges. Consider the following important points before making an investment decision:
Strong Points:
- Diverse customer base.
- Steady revenue growth.
- Efforts to expand.
- Committed to innovation.
- IPO at an attractive price
Cons:
- Raw material procurement risk.
- Sensitive to fluctuations in steel prices.
- Dependence on local markets.
- High working capital intensity.
- competitive landscape of the industry.
- Potential Conflicts of Interest.
Investors with a high risk tolerance can apply for this IPO.
Suresh KP is the founder of Myinvestmentideas. He is his NISM Certified – Investment Advisor and he is a NISM Certified – Research Analyst. I have been analyzing financial markets for the past 20 years. You can contact me at suresh@myinvestmentideas.com.
