The public issue of Rolex Rings, one of India's leading forging companies, has subscribed 130.43 times on July 30, the final day of bidding. The offer closed today.
Investors have put in bids for 74.15 crore equity shares against offer size of 56.85 lakh equity shares, the subscription data available on exchanges showed. The offer size has been reduced to 56.85 lakh equity shares from 81.3 lakh equity shares after fund raising from anchor investors on July 27.
The reserved portion of qualified institutional buyers was subscribed 143.58 percent, while a part set aside for non-institutional investors was subscribed 360.11 times and that of retail investors 24.48 times.
Rolex Rings is planning to garner Rs 731 crore from public issue which comprises a fresh issue of Rs 56 crore and an offer for sale of Rs 675 crore by selling shareholder. The fresh issue proceeds will be utilised for working capital requirements.
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The company manufactures and supplies hot rolled forged, machined bearing rings, and automotive components. Its customers include leading bearing manufacturers. Company is also Tier-I supplier to global auto companies.
Rolex Rings supplies bearing rings and automotive components to over 60 customers in 17 countries primarily located in India, USA, Thailand and European countries.
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Prabhudas Lilladher recommended to subscribe for long term on Rolex Rings IPO given diversified market presence across geographies and product offerings, strong customer relationships offering business visibility along with opportunity to expand, and dominant presence in technology intensive critical components having high entry barrier.
Rolex Rings has posted superior financial performance over last three years reducing debt by around Rs 247 crore (50 percent), led by strong free cash flow generation of around Rs 420 crore over FY18-FY20.
Also read - Rolex Rings IPO: Should you subscribe?
It delivered attractive return ratios driven by high margins. Company further intends to reduce its power and fuel cost by increasing captive power capacity by 16MW. "Against these backdrops, post IPO valuations (15x of FY23 Prabhudas Lilladher EPS) appear cheap as compared to other Forging companies like Bharat Forge (around 30x), Ramkrishna Forgings (around 30x consolidated EPS).
Rolex Rings shares traded at a premium of Rs 480-550 in the grey market, the IPO Watch and IPO Central data showed. This resulted into a price of Rs 1,380-1,450, higher by 53-61 percent over higher end of issue price band of Rs 900 per share.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.