Rolex Rings Limited IPO – Should you subscribe ?

About Rolex Rings Limited –

Incorporated in 2003, Rolex Rings is among the top five forging companies in India. The company manufactures hot rolled forged & machine bearing rings and automotive components. The company supplies its products in India as well as 17 different countries, which include France, Italy, Germany, Thailand, Czech Republic and USA. Nearly 55 percent of revenue comes from outside India. It has 3 manufacturing plants in Rajkot with 22 forging lines.

IPO Details –
IPO Date – 28 July to 30 July
Price band – 880 to 900rs
Lot size – 16 Shares
Proposed Listing Date – 9th august
Issue Size – 731Cr (Fresh issue – 56cr and OFS – 675cr)
Post Issue promoter Holding – 57.64%

Negative point of the company –
The revenues of the company has declined on 4 year basis.
High dependence on performance of automotive sector.
In 2013 company defaulted in payment of certain loans, and approached CDR cell for debt restructuring.

Positive point of the company –
Company has been able to significantly improve its financial profile with the debt-equity ratio improving from 1.79 times as at March 2019 to 0.70 times as of March 2021.
It has credit rating of BB with stable outlook by CARE.
Good net cash flow from operating activities.
The company earned a profit of Rs 86.95 crore in FY21 on revenues of Rs 616.33 crore and profit of Rs 52.94 crore on revenues of Rs 665.99 crore in FY20.
EPS of the company is approx 25rs. And it is available at a PE of 42 times, which is good when we compare it with industry PE of 77.

Keeping above things in mind, one may subscribe in this IPO for listing gains.

Disclaimer – Views shared is only for educational purpose. I am not a SEBI registered advisor. Please consult your financial advisor before making any investment.

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