Rishabh Instruments Limited is preparing for its IPO, which is scheduled to open for tender from 30th August 2023 to 1st September 2023. As an investor, you may be wondering if this IPO is worth investing in. This article provides a comprehensive overview of Rishabh Instruments Limited’s IPO including details, dates, pluses and minuses, and an in-depth review.
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About Rishabh Instruments Limited
Established in 1982, Rishabh Instruments Limited is a well-known company in the manufacturing, design and development of test and measurement instruments and industrial control products. The company’s product range spans a range of solutions designed to measure, control, record, analyze and optimize energy and industrial processes.
Additionally, Rishabh Instruments specializes in providing aluminum high pressure die casting solutions and precision machining services. These services serve clients in areas such as automotive compressor manufacturing and automated high-precision flow meter manufacturing.
One of the pivotal moves in the company’s history was its 2011 acquisition of Lumel Alucast, a European non-ferrous pressure casting company. This strategic acquisition strengthens the company’s manufacturing and supply capabilities, especially in the low voltage current transformer market.
- Rishabh Instruments operates in four different segments.
- electric automation equipment
- Measurement, control and protection devices
- portable test and measurement instruments
- solar string inverter
The company has a large global presence, with three manufacturing divisions and an extensive network of over 270 dealers in over 70 countries. In India alone, Rishabh Instruments is serviced by over 150 dealers covering each state.
Rishab Instruments IPO Details
- Type: Book Issue
- Total issue amount: 490.78 Cr
- Price range: ₹418 to ₹441 per share
- Lot size: 34 shares
- Total number of shares issued: 11,128,858 shares
- New shares: 1,700,680 shares
- Offering: 9,428,178 shares
- Listing exchange: BSE, NSE
Rishabh Instruments IPO RHP link here
What will happen to the company’s finances?
| Fiscal year end/end (amounts in billions) | |||
| detail | 21st year | 22nd year | 23rd year |
|---|---|---|---|
| assets | 512.0 | 563.9 | 648.9 |
| Earnings | 402.5 | 479.9 | 579.8 |
| Profit after tax | 35.9 | 49.7 | 49.7 |
| Profit % | 8.93% | 10.35% | 8.57% |
| net worth | 302.1 | 346.1 | 408.8 |
| Borrowing amount | 92.0 | 96.6 | 102.9 |
Positive Factors for Investing in Rishabh Instruments IPO
- Diverse product portfolio: Rishabh Instruments boasts a wide range of products across multiple segments and is resilient to market volatility in specific sectors.
- International presence: With a strong international presence and extensive dealer network, the company is well-positioned to enter the global market.
- Strategic Acquisition: The acquisition of Lumel Alucast in 2011 strengthened the company’s manufacturing and supply capabilities and diversified its product offering.
- Steady financial growth: The company has shown consistent revenue and profit growth over the years, reflecting its strong fundamentals.
- Market potential: Given the growing demand for energy efficient solutions and automation across various industries, Rishabh Instruments is well positioned to capitalize on these trends.
Risk factors for investing in Rishabh Instruments IPO
- Dependence on manufacturing facilities: Rishabh Instruments’ business relies heavily on its manufacturing operations. Failure of these facilities could adversely affect the company’s operations and financial health.
- Overseas dependency: The company’s reliance on manufacturing facilities in Poland exposes it to risks associated with international operations, including disruptions and regulatory changes.
- Unexpected Delay: The planned expansion of the Nashik manufacturing facility may involve inherent risks related to unforeseen delays and cost overruns, which could impact the company’s financials.
- Customer volatility: Most of Rishabh Instruments’ customers do not have long-term contracts, making its revenue stream vulnerable to customer order cancellations and changes in procurement strategies.
- Quality and liability risks: Manufacturing and service defects can lead to customer dissatisfaction, product liability claims, and damage to the company’s reputation.
Rishab Instruments IPO Valuation
IPO price ranges from Rs 418 to Rs 441 per share.
- Based on a weighted average EPS of ₹ 12.28, the Rishabh Instruments IPO’s PER ranges from approximately 34.06 to 35.94.
- Since there are no other companies in the same industry, it is not possible to confirm whether the issue price is undervalued or overvalued.
What do the experts say about this IPO?
IPO Expert Dilip Dhabada Writes About Chittorgarh Rishabh Instruments Limited’s position as a global leader in energy efficiency solutions and precision engineered products, with a significant share of export revenues, recognizes its strong market presence. However, he believes the IPO is priced well considering the earnings-based valuation for fiscal 2023. Nonetheless, he suggests that well-informed investors accustomed to medium- to long-term investment horizons may still see potential in RIL’s services.
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Rishabh Instruments IPO Review – Should You Subscribe?
- The company’s strong global presence, diversified product portfolio and steady financial growth have made it stand out.
- However, investors should remain vigilant against unforeseen delays in manufacturing reliance, foreign operations and expansion plans. The IPO price cannot be determined whether it is undervalued or overvalued.
- High risk investors can invest in such IPOs.
