Rishabh Instruments Limited’s Initial Public
Offering to open on Wednesday, August 30, 2023, sets price band at ₹418 to ₹441
per Equity Share
·
Price Band of ₹418 – ₹441 per equity share
bearing face value of ₹10 each (“Equity Shares”)
·
Bid/Offer Opening Date – Wednesday, August 30,
2023 and Bid/Offer Closing Date – Friday, September 01, 2023.
·
Minimum Bid Lot is 34 Equity Shares and in
multiples of 34 Equity Shares thereafter.
·
The Floor Price is 41.8 times the face value
of the Equity Share and the Cap Price is 44.1 times the face value of the
Equity Share.
Risks
to Investors
1. Concentration
risk: We are dependent on our Poland Manufacturing Facility II and in
Fiscals 2023, 2022 and 2021, it manufactured 62.73%, 58.25% and 59.18%,
respectively, of the total products with a capacity utilisation of 73.70%,
64.81% and 66.95%.
2. Our business is dependent on our
Manufacturing Facilities. In Fiscals 2023, 2022 and 2021, our Nashik
Manufacturing Facility I manufactured 17.45%, 19.67% and 14.30% and our Poland
Manufacturing Facility II manufactured 62.73%, 58.25% and 59.18%, respectively,
of the total products.
3. We propose to utilise₹ 628.86 million of the Net Proceeds of the Offer towards Expansion
of Nashik Manufacturing Facility I and we have not entered into any definitive
arrangements to utilise certain portions of the Net Proceeds of the Offer.
4. Customer
concentration risk: In Fiscals 2023, 2022 and 2021, revenue from our
top 10 customers were ₹1,817.91
million, ₹1,128.04 million and ₹1,030.39 million, respectively,
representing 31.92%, 23.99% and 26.42%, respectively, of our total revenue from
operations.
5. Product
Liability: We may lose our customers and may be subject to product
liability claims or claims alleging deficiency in service. One of our
customers, in April 2022, issued a legal notice to our Company for alleged
failure to adhere to their quality standard and technical hurdles faced in
relation to the certain products supplied by our Company and have thereafter, ended
their association/ relationship with us.
6. We are yet to capitalise on the development
of the American National Standards Institute current transformers in the United
States and/or acquire new customers in the United States pursuant to such
product development.
7. Dependence
on Subsidiaries: Our Subsidiaries contributed ₹3,995.57 million, ₹3,391.27
million and ₹2,793.55 million
representing 67.09%, 72.12% and 71.64% of our total revenue from operations in
Fiscals 2023, 2022 and 2021, respectively.
8. Dependence
on semiconductors availability: We source microcontroller semiconductor
chips as an input for our manufacturing operations. Shortages in the supply of
semiconductors have had, and may continue to have, a material adverse effect on
the industry and on our results of operations and financial condition.
9. The three BRLMs associated with the Offer
have handled 20 public issues in the past three years, out of which 7 issues
closed below the IPO price on listing date.
|
Name of
the BRLMs
|
Total
public issue
|
Issues
closed below IPO price on listing date
|
|
DAM
Capital Advisors Limited*
|
12
|
4
|
|
Mirae
Asset Capital Markets (India) Private Limited*
|
NIL
|
NIL
|
|
Motilal
Oswal Investment Advisors Limited*
|
7
|
2
|
|
Common
issues handled by the BRLMs
|
1
|
1
|
|
Total
|
20
|
7
|
*Issues handled where there were no common
BRLMs
10. The Offer Price, our Market Capitalization
to Revenue, Market Capitalization to Earnings and Enterprise value to EBITDA of
our Company and return on net worth may not be indicative of the market price
of the Equity Shares on listing or thereafter.
|
Market Capitalization to revenue from
operations (Fiscal 2023) multiple at the Cap Price (number of times)
|
Price to Earnings Ratio (based on Fiscal
2023 diluted EPS) at the Cap Price (number of times)
|
Nifty Fifty P/E ratio*
|
Weighted average return on networth for the
last three financial years (%)
|
|
2.94
|
34.56
|
22.39
|
12.36
|
*As on August 17, 2023
|
Particulars (for Fiscal 2023)
|
Ratio vis-à-visFloor Priceof ₹ 418
|
Ratio vis-à-visCap Priceof ₹ 441
|
|
(In multiples, unless otherwise specified)
|
|
Market capitalization to revenue from
operations
|
2.79
|
2.94
|
|
Market capitalization to earnings (profit
after tax)
|
32.01
|
33.69
|
|
Enterprise value to EBITDA
|
18.39
|
19.36
|
|
Price-to-earnings ratio (Basic EPS)
|
32.55
|
34.35
|
|
Price-to-earnings ratio (Diluted EPS)
|
32.76
|
34.56
|
11. Details of weighted average cost of
acquisition of all Equity Shares transacted in last 3 years, 18 months and one
year, preceding the date of RHP:
|
Period prior todate of filingof the Red
HerringProspectus
|
WeightedAverage Costof Acquisition (₹)*
|
Cap Priceis ‘X’ times theWeighted
AverageCost of Acquisition
|
Range ofacquisition price:Lowest Price
–Highest Price(₹)*
|
|
Last One year
|
29.02
|
15.20
|
0-174.10
|
|
Last 18 months
|
29.02
|
15.20
|
0-174.10
|
|
Last Three years
|
29.02
|
15.20
|
0-174.10
|
*As certified by Shah & Mantri, Chartered
Accountants by the way of their certificate dated August 23, 2023.
12. Weighted average cost of acquisition
compared to Floor Price and Cap Price:
|
Past transactions
|
WACA(in ₹)
|
Floor Pricein ₹ 418
|
Cap Pricein ₹441
|
|
WACA of Primary Issuances during18 months
prior to RHP (excludingissuance of bonus shares)
|
89.56*
|
4.67 times
|
4.92 times
|
|
WACA of Secondary Transactionsduring 18
months prior to RHP(excluding gifts)
|
Notapplicable
|
Not applicable
|
Not applicable
|
* 3,606,110 CCPS were acquired by SACEF on
September 17, 2013 at a price of ₹174.10 per CCPS. Pursuant to a resolution
passed by the Board of Directors of the Company dated July 24, 2023, and a
resolution passed by the shareholders of the Company dated July 25, 2023, the
CCPS have been converted into 7,010,278 Equity Shares of ₹ 10 each. Hence, for
the purposes of the table above, the date of conversion of the CCPS into Equity
Shares has been considered as the date of acquisition and the original cost of
acquiring the CCPS has been considered towards determining the acquisition
price.
Mumbai, August 25, 2023:Nashikhead quarteredRishabh Instruments
Limited, a global energy efficiency solution company,with its corporate office
in Nashik, Maharashtra, focused on electrical automation, metering and
measurement, precision engineered products and aluminium high pressure die
castings with diverse applications across industries including power,
automotive and industrial sectorshas fixed the price band at ₹418to ₹441per
Equity Share for its initial public offer. The initial public offering (“IPO” or “Offer”) of the
Company will open on Wednesday, August 30, 2023, for subscription and closes on Friday,
September 01, 2023. Investors can bid for a minimum of 34Equity Shares
and in multiples of 34Equity Shares thereafter.
The IPOof
face value of ₹10 per Equity Share comprises of fresh issuance of equity
shares worth Rs 75 crore and an Offer for Sale (OFS) up to 9.43 million equity
shares.
Narendra
JoharimalGoliya founded Rishabh Instruments in the year 1982 and has over 4
decades of experience in the electrical and electronic instruments industry.
The company supplies a wide range of electrical measurement and process
optimization equipment and engages in the design, development, manufacturing,
and sale of devicessignificantly under its own brandacrossseveral sectors.
It is a vertically
integrated playerinvolved in designing, developing, manufacturing and supplying
electricalautomation devices; metering, control and protection devices;
portable test and measuring instruments; andsolar string inverters.
Additionally, through its subsidiary, Lumel Alucast, it manufactures and
supplies high pressure die cast aluminum components to the automation and
automotive industry mainly in Europe.
According to the
F&S report mentioned in the Red Herring Prospectus (“RHP”), the Company is a global leader
in the manufacture and supply of analog panel meters and is also one of the leading
global manufacturers and suppliers of low voltage current transformers. For meters,
controllers, and recorders, Lumel is the most popular brand in Poland, and
Lumel Alucast is one of the leading non-ferrous pressure casting players in
Europe.
Rishabh
Instruments’ revenue from operations increased by 21.11% from Rs 470.25 crore
in Fiscal 2022 to Rs 569.54 crore in Fiscal 2023, primarily driven by increase
in revenue from sale of goods and from sale of services, whereas profit grew to
Rs 49.69 crore in Fiscal 2023, as compared to Rs 49.65 crore in Fiscal 2022.
In case of any revision in the
Price Band, the Bid/ Offer Period shall be extended for at least three
additional Working Days after such revision of the Price Band, subject to the
total Bid/Offer Period not exceeding 10 Working Days. In cases of force
majeure, banking strike or similar circumstances, our Company in consultation
with the BRLMs, for reasons to be recorded in writing, extend the Bid / Offer
Period for a minimum of three Working Days, subject to the Bid/ Offer Period
not exceeding 10 Working Days. Any revision in the Price Band, and the revised
Bid/ Offer Period, if applicable, shall be widely disseminated by notification
to the Stock Exchanges by issuing a press release and also by indicating the
change on the websites of the BRLMs and at the terminals of the Members of the
Syndicate and by intimation to Designated Intermediaries and the Sponsor
Bank(s). The Offer is being made in terms of Rule 19(2)(b) of the Securities
Contracts (Regulation) Rules, 1957, as amended (the “SCRR”), read with
Regulation 31 of the SEBI ICDR Regulations. The Offer is being made through the
Book Building Process in accordance with Regulation 6(1) of the SEBI ICDR
Regulations wherein not more than 50% of the Offer shall be available for
allocation on a proportionate basis to Qualified Institutional Buyers (“QIBs”)
(the “QIB Portion”), provided that our Company and Selling Shareholders in
consultation with the BRLMs may allocate up to 60% of the QIB Portion to Anchor
Investors and the basis of such allocation will be on a discretionary basis by
our Company and Selling Shareholders, in consultation with the BRLMs, in
accordance with the SEBI ICDR Regulations (the “Anchor Investor Portion”), of
which one-third shall be reserved for domestic Mutual Funds, subject to valid
Bids being received from the domestic Mutual Funds at or above the price at
which allocation is made to Anchor Investors (“Anchor Investor Allocation
Price”). In the event of under-subscription or non-allocation in the Anchor
Investor Portion, the balance Equity Shares shall be added to the QIB Portion
(other than the Anchor Investor Portion) (the “Net QIB Portion”). Further, 5%
of the Net QIB Portion shall be available for allocation on a proportionate
basis to Mutual Funds only, subject to valid Bids being received at or above
the Offer Price, and the remainder of the Net QIB Portion shall be available
for allocation on a proportionate basis to all QIBs, including Mutual Funds,
subject to valid Bids being received at or above the Offer Price. Further, not
less than 15% of the Offer shall be available for allocation to
Non-Institutional Investors (“Non-Institutional Category”) of which one-third
of the Non-Institutional Category shall be available for allocation to Bidders
with an application size of more than ₹200,000 and up to ₹1,000,000 and
two-thirds of the Non-Institutional Category shall be available for allocation
to Bidders with an application size of more than ₹1,000,000 and
under-subscription in either of these two sub-categories of the
Non-Institutional Category may be allocated to Bidders in the other
sub-category of the Non-Institutional Category in accordance with the SEBI ICDR
Regulations, subject to valid Bids being received at or above the Offer Price.
Further, not less than 35% of the Offer shall be available for allocation to
Retail Individual Investors (“Retail Category”), in accordance with the SEBI
ICDR Regulations, subject to valid Bids being received from them at or above
the Offer Price. All Bidders (except Anchor Investors) shall mandatorily
participate in this Offer only through the Application Supported by Blocked
Amount (“ASBA”) process and shall provide details of their respective bank
account (including UPI ID (defined hereinafter) in case of UPI Bidders (defined
hereinafter) in which the Bid Amount will be blocked by the Self Certified
Syndicate Banks (“SCSBs”) or pursuant to the UPI Mechanism, as the case may be.
Anchor Investors are not permitted to participate in the Anchor Investor
Portion through the ASBA process. For details, see “Offer Procedure” on page
463 of the RHP.
DAM Capital Advisors Limited, Mirae
Asset Capital Markets (India) Private Limited and Motilal Oswal Investment
Advisors Limited are the book running lead managersto the Offer and KFin
Technologies Limited is the Registrar to the Offer. The Equity Shares are
proposed to be listed on the main board platform of the stock exchanges i.e., BSE
Limited (“BSE”) and National Stock Exchange of India Limited (“NSE")
