Rishabh Instruments listed on the bourses at a premium of 4.3 percent on September 11. The stock started trading at Rs 460.05 on the NSE, and Rs 460 on the BSE, while its issue price was Rs 441.
Meanwhile, grey market premium had suggested a 12 percent pop on listing.
The energy efficiency solution company has a focus on electrical automation, metering, measurement, and precision-engineered products. It caters to power, automotive, and industrial sectors through its five manufacturing facilities.
On the final day of bidding, the IPO of Rishabh Instruments was subscribed 31.65 times, receiving bids for 24.65 crore equity shares against the issue size of 77.9 lakh shares.
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For the year ended March 2023, the company recorded a healthy topline growth with revenue from operations growing 21.1 percent on-year to Rs 569.5 crore, but profit came in almost flat at Rs 49.69 crore against Rs 49.65 crore during the same period, impacted by weak operating margin, given the high input cost and employee expenses.
Analysts believe the stock is a solid long-term play. At the upper end of the price band, the company was fairly valued at price-to-earnings of 34.3x FY23 earnings, they said.
"The company is operating in large addressable markets and can benefit from industrialization trends," Anand Rathi Limited said.
"Being a unique business, the business may command a scarcity premium and long-term investors are recommended to subscribe to the issue," SBI Securities had said.
Rishabh Instruments has set a target to clock Rs 1,000 crore, along with an enhanced margin of 20 percent, in the next two years, by FY25-26.
In a pre-IPO interview with Moneycontrol, the company's chairman Narendra Goliya explained that since the company's fixed costs account for 30 percent of the overall expenses and revenue grows further, margins will only grow further.
However, the company is heavily dependent on the subsidiaries as the subsidiaries generates 67.09 percent of the total revenue as of FY23, which is a key risk, as per brokerages.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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