Rolex Rings’ share sale via initial public offering (IPO) was subscribed 9.26 times on Thursday- July 29 – the second day of its issue. The public offer opened for subscription on July 28 and will close tomorrow – July 30, remaining open for investors for a period of three days. The IPO was oversubscribed at the end of the first of its issue.
On Thursday, retail individual investors showed overwhelming interest as the portion reserved for them was subscribed 15.89 times – the highest among the three groups of investors. The portion set aside for non-institutional investors (NII) was subscribed 5.85 times, while qualified institutional buyers (QIB) showed tepid interest as the portion reserved for them was subscribed 0.23 times.
Rolex Rings’ Rs 731 crore IPO consists of a fresh issue of ₹ 56 crore and an offer for sale of up to Rs 675 crore. The leading forging company is selling shares in the price band of Rs 880-900 per share and the retail investors can buy shares in a minimum of one lot of 16 shares up to a maximum of 13 lots.
The company will use the IPO proceeds for long-term working capital requirements and for general corporate purposes.
”Rolex Rings is one of India’s top five bearings makers and has a sizable exposure to the automobile ancillary segment.
At the higher end of the price band, the issue is priced at a PE ratio of ~25 times based on FY21 earnings per share (on a post-issue basis). This is lesser than its listed peers Ramkrishna Forgings and MM Forgings.
Given a decline in the company’s topline and bottomline, and concerns around the company’s delayed repayments in the past we remain ‘Neutral’ on the prospects of the issue. Given a fancy for IPOs in the ongoing season, the company may still see strong subscription numbers. However, from a long-term perspective, it would be better to wait and watch a few more quarters before investing,” SEBI-registered investment advisor INDmoney said in a report.