The IPO of Rolex Rings, the manufacturer of hot rolled forged bearing rings and automotive components, has subscribed 9.26 times on July 29, the second day of bidding. The issue closes on July 30.
The offer, so far, has received bids for 5.26 crore equity shares against an initial public offering size of 56.85 lakh equity shares, the subscription data available on the exchanges showed.
Retail investors remained at the forefront as the portion set aside for them was subscribed 15.88 times and that of non-institutional investors 5.85 times.
Qualified institutional buyers have put in bids for 3,70,096 equity shares against their reserved portion of 16.24 lakh equity shares.
Rolex Rings, one of the top five forging companies in India, intends to raise Rs 731 crore through its public offer. The offer comprises a fresh issue of Rs 56 crore and an offer for sale of Rs 675 crore by Rivendell PE LLC. The price band for the IPO has been fixed at Rs 880-900 per equity share.
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The company serves 60 customers across 17 countries and is one of the key suppliers for leading bearing manufacturers. The company’s comprehensive product portfolio catering to auto, industrial, infra and renewable segments and long-standing customer relationship gives credence to the quality and sustainability of its products.
"Rolex Rings has been priced at 28.2x FY21EPS on a post-issue upper band basis. A sticky clientele, increasing share of business amongst existing customers, improving operational efficiencies led by better utilisation and exit from CDR (corporate debt restructuring )remain a key catalyst for Rolex Rings," said ICICI Direct which recommended subscribe rating to the issue.
Also read: Rolex Rings IPO opens: Should you subscribe?
The company had entered CDR in 2013. Subsequently, fixed and current assets were secured by encumbrance whereas promoter holdings were pledged. Nonetheless, the company has repaid 95 percent of its debt (FY21 debt/equity 0.7x) and is expected to exit CDR before FY22. "This should offer flexibility in managing borrowings and taking other business-related decisions," said ICICI Direct.
Further, the company is making strides to reduce its carbon footprints and by reducing power costs (around 8 percent of sales) led by investments in renewable energy.
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Rolex Rings shares were trading at a healthy premium of Rs 450-460 in the grey market, the IPO Watch and IPO Central data showed. The trading price comes to Rs 1,350-1,360, higher by 50-51 percent over the issue price of Rs 900, the higher end of the price band.
The grey market is an unofficial trading platform where shares get traded well before the allotment in the IPO and listed on bourses.
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