Rishabh Instruments IPO; should you subscribe? 

Rishabh Instruments IPO: Rishabh Instruments is set to launch an Initial Public Offering (IPO) as a book-built issue, with the IPO's total issue size amounting to Rs 490.78 crore. The IPO price range for Rishabh Instruments is between Rs 418 and Rs 441 per share. The IPO subscription window is scheduled from August 30, 2023, to September 1, 2023. Upon listing, the company's shares will be traded on both the BSE and NSE.

IPO details 

The IPO consists of a total of 11,128,858 shares, valued at the aforementioned total issue size. The face value of each share is ₹10. The lot size for this IPO is 34 shares. Within the total issue size, there is a fresh issue component comprising 1,700,680 shares, valued at up to Rs 75.00 crore. Additionally, there is an offer for sale component, involving the sale of 9,428,178 shares with a face value of Rs 10 each, aggregating up to Rs 415.78 crore.

This Book Built Issue will be listed on both the BSE and NSE after the IPO's conclusion. Prior to the issue, the company's shareholding was 36,260,678 shares, and post-issue, it is expected to increase to 37,961,358 shares. This IPO presents a notable opportunity for investors to engage with Rishabh Instruments in the capital market.

IPO reservations 

Qualified institutional buyers (QIBs) are eligible for up to 50 per cent of the net offer, reflecting a substantial allocation for this group. Non-institutional investors (HNIs) are guaranteed a minimum of 15 per cent of the total offer, ensuring their participation in the IPO. Retail investors, on the other hand, will receive no less than 35 per cent of the total offer, demonstrating a commitment to involve individual investors in the offering. This well-structured reservation distribution is designed to cater to a diverse spectrum of investors, ensuring equitable access to the Rishabh Instruments IPO.

Financial performance 

Between FY22 and FY23, the company's assets increased from Rs 563.89 crore to Rs 648.93 crore. The revenue rose from Rs 479.92 crore in FY22 to Rs 579.78 crore in FY23. Profit after tax grew from Rs 49.65 crore in FY22 to Rs 49.69 crore in FY23. The net worth of Rishabh Instruments increased from Rs 346.10 crore in FY22 to Rs 408.75 crore in FY23. In terms of total borrowing, there was an increase from Rs 96.57 crore in FY22 to Rs 102.85 crore in FY23.

Objectives of the IPO

The primary objective for utilizing the net proceeds from the Rishabh Instruments issue is to contribute to specific areas of the company's growth. One significant focus is on the expansion of the Nashik Manufacturing Facility I. By allocating a portion of the funds to this, the company aims to bolster its manufacturing capabilities and capacity, thereby supporting its strategic expansion plans.

Apart from this targeted investment, a portion of the proceeds will be allocated for general corporate purposes. These encompass a range of operational needs that contribute to the overall functioning and development of the company. These purposes may include initiatives that enhance operational efficiency, support research and development activities, and provide the flexibility necessary for effective day-to-day operations.

Should you subscribe?

According to market expert Ravi Singh, investors are advised to subscribe to the IPO. 

"Rishabh Instruments is a leading organization in the energy efficiency solutions and precision engineering products sector. Most of the company's revenue comes from exports, indicating a strong position in the global market. The IPO is good from a long-term perspective, and the issue price is also reasonably priced, giving room for steady returns in the future. Hence, we advise investors to subscribe for the IPO," he said.