Royalarc Electrodes Limited IPO

Apply 0
Avoid 0

Royal Arc Electrodes Limited specializes in the manufacturing of welding consumables such as: Welding electrodes, Flux-cored wires and MIG/TIG wires

These consumables are essential in welding applications for critical components such as tanks, boilers, heavy structures, beams, pipes, cylinders, and pressure vessels. These products cater to a diverse array of industries, including:
i. Railways                                                ii. Roadways and airport infrastructure
iii. Refineries and shipyards                iv. Mines and sugar industries
v. Telecom                                               vi. Thermal power stations
vii. Pre-Engineered Building (PEB) sectors

In addition to manufacturing, the company is engaged in trading ancillary products like wheels, electro slag, welding flux-cored wire, TIG/MIG wires, and saw flux.

Export and Clientele

The company caters to both domestic and international markets, exporting products to 20+ countries as of the disclosed financial period. Its customer base includes repeat clients, emphasizing strong client relationships and certifications such as:
i. American Bureau of Shipping (ABS)                        ii. Indian Boilers Regulation (IBR)
iii. Bureau of Indian Standards (BIS)

Conclusion

With its strong manufacturing capabilities, a diverse portfolio of products, international certifications, and a dedicated team, Royal Arc Electrodes Limited is well-positioned to serve a broad range of industries. Its ability to deliver quality products tailored to customer requirements ensures a competitive edge in both domestic and international markets.

Objects of the Royalarc Electrodes Limited IPO:

The Company proposes to utilize the net proceeds from the Fresh Issue towards funding the following objects: i. Funding towards the expansion of the manufacturing facility situated at Village Zaroli, Umbergaon Valsad, Gujarat, Bharat ii. Funding the working capital requirements of the Company iii. General corporate purposes The Company will not receive any proceeds from the Offer for Sale and the proceeds from the Offer for Sale will not form part of the Net Proceeds. Total number of share issue :- i. Fresh issue is 18,00,000 shares, ii. Offer for sale is 12,00,000 shares.
DRHP of Royalarc Electrodes Limited IPO
RHP of Royalarc Electrodes Limited IPO

Royalarc Electrodes Limited IPO Details:

Open Date: Feb 14 2025
Close Date: Feb 18 2025
Total Shares: 30,00,000
Face Value: ₹ 10 Per Equity Share
Issue Size: 36.00 Cr.
Lot Size: 1200 Shares
Issue Price: ₹ 114 - 120 Per Equity Share
Listing At: NSE Emerge
Listing Date: Feb 21 2025

Promoters And Management:

Bipin Sanghvi, the Chairman and Managing Director of the Company, has over 35 years of experience in the line of business. Despite having no formal education, he has been associated with the Company since its inception and oversees overall management. Hardik Sanghvi, the Whole Time Director and CFO of the Company, holds an MBA (2006) and has been with the Company since 2002. With over 16 years of experience, he currently oversees sales and marketing strategy. Swagat Sanghvi, the Whole Time Director of the Company, has been associated with the Company since 2010. With over 12 years of experience, he oversees production and strategic planning, despite having no formal education.

Financials of Royalarc Electrodes Limited IPO:

In Cr.
Particulars Sep 30, 2024 March 31, 2024 March 31, 2023 March 31, 2022
Revenue from Operations 45.60 99.78 96.94 62.90
Growth in revenue 2.94% 54.09%
Domestic Revenue 85.40% 85.56% 82.34% 73.21%
Export Revenue 14.60% 14.44% 17.66% 26.78%
EBITDA 5.65 18.11 15.42 5.50
EBITDA Margins 12.40% 18.16% 15.91% 8.75%
PAT 3.17 11.92 9.56 2.12
PAT Margins 6.96% 11.95% 9.87% 3.37%
ROCE 37.73% 41.81% 12.63%
D/E ratio 0.04 0 0.05 0.38
CFOA 0.94 5.62 12.58 2.40

Comparison With Peers:

Companies Revenue EBITDA Margins PAT Margins D/E Ratio MCap P/E
Royal Arc Electrodes  (FY 2024) 99.78 Cr. 18.16% 11.95% 0.00 133.20 Cr. 11.17
ESAB India (TTM) 1,347 Cr. 18% 12.77% 0.01 7,361 Cr. 42.70
Ador Welding (TTM) 1,074 Cr. 11% 8% 0.08 1,567 Cr. 18.10
Gee (TTM) 338 Cr. 6% 2.07% 0.40 338 Cr. 50.60
Rasi Electrodes (TTM) 83.95 Cr. 4.78% 3.60% 0.06 66.90 Cr. 22.10

Recommendation on Royalarc Electrodes Limited IPO:

Review and Recommendation of Royal Arc Electrodes Limited IPO by team IZ is 3/10.

Lead Manager of Royalarc Electrodes Limited IPO:

  1. Fedex Securities Limited

Registrar of Royalarc Electrodes Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

Royalarc Electrodes Limited 72 B, Bombay Talkies Compound, S.V. Road Malad West, Mumbai, , 400064 Phone: +91 78880 00553 Email: cs@royalarc.in Website: https://royalarc.in/

Discussion on Royalarc Electrodes Limited IPO:

Leave a Reply