Rolex IPO Should You Subscribe. Financials, Managment and Other Details.

Rolex IPO Should You Subscribe. Financials, Managment and Other Details.

IPO Details :

IPO Opening Date Jul 28, 2021
IPO Closing Date Jul 30, 2021
Issue Type Book Built Issue IPO
Face Value ₹10 per equity share
IPO Price ₹880 to ₹900 per equity share
Market Lot 16 Shares
Min Order Quantity 16 Shares
Listing At BSE, NSE
Issue Size [.] Eq Shares of ₹10
(aggregating up to ₹731.00 Cr)
Fresh Issue [.] Eq Shares of ₹10
(aggregating up to ₹56.00 Cr)
Offer for Sale 7,500,000 Eq Shares of ₹10
(aggregating up to ₹675.00 Cr)

 

 

Automotive components manufacturer Rolex Rings will also open its offer on July 28 and will close on July 30, comprising a fresh issue of Rs 56 crore and an offer for sale of up to 75 lakh equity shares by Rivendell PE LLC.

Rolex Rings, one of the top five forging companies in India, has raised Rs 219.3 crore from 26 anchor investors on July 27, ahead of IPO opening.

The offer will open for subscription on July 28 and will close on July 30.

The company will utilise net proceeds from the fresh issue towards working capital requirements. On the other hand, Rolex Rings has the fifth largest forging capacity in India with 60 customers across 17 locations. The company supplies its products to domestic as well as international automotive companies.

About the company

Rolex Rings are among the top five forging companies in India. It was incorporated in 2003. The company manufactures hot rolled forged & machine bearing rings and automotive components.

A wide range of product offerings such as automotive parts, hot forged and machined alloy steel bearing rings weighing from 0.01 Kg to 163+ kg caters to different industries i.e. automotive, industrial infrastructure, railways, renewable energy, etc.

The grey market is an unofficial platform. The trading in shares starts from the announcement of the price band till the listing of shares on the bourses.

Rolex Rings, 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, Angel Broking pointed out.

The company has a long-standing relationship with existing clients and with newer products, it should be able to increase the market share.

At a price band of Rs 960-970, the company is seeking PE of nearly 42 times without considering the deferred tax credit of Rs 25 crore, which is reasonable given its strong return ratios

The company aims to mobilise Rs 731 crore through its public offer which comprises a fresh issue of Rs 56 crore and an offer for sale of 75 lakh equity shares by Rivendell PE LLC. The net proceeds from the fresh issue will be utilised for working capital requirements.

Its equity shares are proposed to be listed on the BSE and National Stock Exchange on August 9.

Strengths :

  • Among the leading forging companies in India.
  • Strong manufacturing capabilities.
  • Comprehensive product portfolio.
  • Geographically diversified revenue base.
  • Strong and consistent financial performance track record.

Weakness:

The company has delivered a poor sales growth of 0.59% over the past five years.

Conclusion:

Given the cyclical nature of the business, past record of loan default, growth prospects, better return ratios, and a focus on reducing debt, investors with a high-risk appetite may consider the IPO.

 

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