ROLEX RINGS IPO

IPO Details:

Price Band: 880-900

Cutoff Price: 900

About Company:

Rolex Rings is one of the top five forging companies in India in terms of installed capacity and 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, amongst other segments. Company supply domestically and internationally to large marquee customers, including some of the leading bearing manufacturing companies, tier-I suppliers to global auto companies and some auto OEMs. SKF India Limited, Schaeffler India Limited, Timken India Limited, NEI and NRB collectively account for 81% of the market share of Indian bearing industry. Company is one of the key manufacturers of bearing rings in India and caters to most of the leading bearing companies in India.

Competitive Strengths:

1. We have a comprehensive product portfolio;

2. Manufacturing capabilities which offer scale, flexibility and locational advantage;

3. Long-standing customer relationships and geographically diversified revenue base;

4. Experienced Promoters and management team with strong domain expertise;

5. Strong financial performance over the past three years.

Strategies:

1. Increasing the share of business amongst existing customers;

2. Expand customer base;

3. Continuing focus on improving operational efficiency;

4. Further enhance manufacturing infrastructure and product portfolio;

5. Reduce power costs and reduce our carbon footprint;

6. Further improve financial risk profile.

Financial Performance:

Company's Revenue is decreasing but Net Profit and EPS are increasing year on year. There is not growth in topline. With EPS of 36.26, the company's P/E is 24.8.

Objects of the Issue:

The Net Proceeds from the Issue are proposed to be utilised in the following manner:

1. Funding long term Working Capital Requirement

2. Offer for Sale

Competitors Comparison:

Rolex Rings IPO seems to be undervalued based on the P/E ratio and Price to book value.

Grey Market Premium:

Our view: GMP of the IPO is decent and also the price is fairly valued after comparing it with listed competitors. We can expect this IPO to list at premium and hence I would be applying for this IPO for listing gains.

Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

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