The initial public offering of Rolex Rings is set to open for subscription in the current week. This would be 30th IPO getting launched in the year 2021.
Here are 10 key things to know before subscribing public issue:
1) Public issue
The public issue comprises a fresh issue of Rs 56 crore and an offer for sale of 75 lakh equity shares by Rivendell PE LLC.
2) IPO Dates
The offer will open for subscription on July 28 and will close on July 30. Anchor book, if any, will be open for a day on July 27.
3) Price Band
Rolex Rings, in consultation with merchant bankers, has fixed a price band of Rs 880-900 per equity share for the public issue.
4) Fund Raising and Objects of Issue
The company is planning to garner Rs 716 crore at the lower price band, and Rs 731 crore at the higher end. It will utilise net proceeds from fresh issue for working capital requirements.
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5) Lot Size and Investors' quota
Investors can bid for a minimum of 16 equity shares and in multiples of 16 thereafter. At the higher price band of Rs 900 per share, the minimum investment amount would be Rs 14,400 and the maximum would be Rs 1,87,200 for 13 lots. Retail investors are not allowed to invest beyond Rs 2 lakh.
Up to 50 percent of the offer is reserved for qualified institutional buyers, 35 percent for retail investors, and the remaining 15 for non-institutional investors.
6) Company Profile
Rolex Rings is one of the top five forging companies in India, in terms of installed capacity. It is a manufacturer and global supplier of hot rolled forged and machined bearing rings, and automotive components for segments of vehicles, including two-wheelers, passenger vehicles, commercial vehicles, off-highway vehicles, electric vehicles), industrial machinery, wind turbines and railways, among other segments.
It is one of the key manufacturers of bearing rings in India and caters to most of the leading bearing companies in India.
With three manufacturing units in Rajkot, the company has 22 forging lines with a combined installed capacity of 1,44,750 MTPA (million tonnes per annum), machining facilities consisting of 528 spindles with a combined installed capacity of 69 million parts per annum, and other machinery including heat treatment furnaces, cold rolling machines and other infrastructure.
The location of its manufacturing facilities at Rajkot helps it in accessing various automotive clusters in North India, West India and South India, as well as cater to the export markets through the ports of Kandla, Mundra and Pipavav.
In FY21, the company supplied bearing rings and automotive components to over 60 customers in 17 countries, primarily located in India, the US and in European countries such as Germany, France, Italy, the Czech Republic, and Thailand.
It has been able to maintain long-standing relations with its customers and 70 percent of the 10 large customers in FY21 have been with the company for over a decade.
The company operates windmills with installed capacity of 8.75 MW. It is expanding the capacity of solar projects by an installed capacity of 16 MW and has already placed purchase orders for equipment with installed capacity of 7.35 MW, which will help it reduce carbon footprint and expanding profit margins.
7) Strengths and Strategies
a) The company has a comprehensive product portfolio.
b) Its manufacturing capabilities offer scale, flexibility and locational advantage.
c) It has long-standing customer relationships and geographically diversified revenue base.
d) The company’s promoters and management teams are experienced and have strong domain expertise.
e) It has strong financial performance over the past three years.
a) The company intends to continue focusing on increasing share of business from existing customers by broadening the portfolio of products it offers, higher engagement with existing customers, investment in manufacturing infrastructure, and to continue to engage with such customers during new product development.
b) The company intends to continue leveraging its products and long-term relationships and credentials with existing customers and referrals from such customers to further develop and strengthen customer base.
c) It aims to continue to improve profitability by constant cost optimisation, improving product mix by enhancing contribution of higher value-added machine products and increasing capacity utilisation.
d) It intends to further enhance manufacturing infrastructure and product portfolio.
e) It intends to de-risk the business' dependence on changes in power tariffs and reduce carbon footprint through investment in renewable energy.
f) The company intends to further improve its financial risk profile.
Rolex Rings has been able to significantly improve its financial profile with the debt-equity ratio improving from 1.79 times as at March 2019 to 0.70 times as of March 2021, which is also reflected in its credit rating CARE BB with stable outlook. The company has been able to achieve this through net cash flow from operating activities.
The company earned a profit of Rs 86.95 crore in FY21 on revenues of Rs 616.33 crore and profit of Rs 52.94 crore on revenues of Rs 665.99 crore in FY20.
9) Promoters and Management
The promoters of the company are Rupesh Dayashankar Madeka, Jiten Dayashankar Madeka, Manesh Dayashankar Madeka, Pinakin Dayashankar Madeka, and Bhautik Dayashankar Madeka, who are having a 48.80 percent shareholding. The promoter group holds a 10.18 percent stake, taking their total stake in the company to 58.99 percent.
Under public shareholders, Rivendell PE LLC (formerly known as NSR-PE Mauritius) has 41.01 percent stake in Rolex Rings. Currently, the company has 12 shareholders.
Manesh Madeka is the Chairman and Managing Director. He and Rupesh Madeka started the business under a partnership firm, Rolex Industries, in 1978. He has over 40 years of work experience in marketing, production and finance.
Bhautik Madeka is a whole-time director. He holds a Bachelor's Degree in commerce from Ranchi University. He has over 18 years of work experience in production, planning and control.
Mihir Rupeshkumar Madeka is also a whole-time director. He holds a Bachelor's in engineering from Nagpur University. He has over 18 years of work experience in marketing functions and in the development of new customers and products.
Vivek Sett is the nominee director on the board, while Pravinchandra Ratilal Dholakia, Dipesh Dhirajlal Kundaliya, Jignasa Pravinchandra Mehta, and Ashit Ravishankar Vankani are independent directors.
Hiren Dilipbhai Doshi is the Chief Financial Officer. He joined the company as Vice President – Finance, with effect from February 1, 2009, and was designated as the Chief Financial Officer with effect from March 12, 2021.
He is a certified chartered accountant from the Institute of Chartered Accountants of India. Prior to joining the company, he worked with Atul Auto for over 11 years.
10) Allotment, refunds and listing dates
The company will finalise the basis of the share allotment with the designated stock exchange on August 4. Money will be refunded on August 5 and equity shares will get credited to demat accounts on August 6.
Trading will commence with effect from August 9. The shares are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange.
Equirus Capital, IDBI Capital Markets & Securities, and JM Financial are the book- running lead managers to the offer.