Raw Edge Industrial Solutions Limited IPO

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(i) Raw Edge Industrial Solutions Limited was established in the year 2005 with an aim of providing industrial minerals to manufacturing industries at competitive prices. Raw Edge is an innovation-driven enterprise engaged in delivering fully integrated solutions of Raw Material supplies to large and medium industrial houses. They are one of the leading Manufacturers and Suppliers of quality range of Calcined Lime, Dolomitic Lime, Hydrated Lime, AAC Lime, Calcined Magnesite, Clinker, Quartz, Gypsum, Imported Coal, etc. They are renowned for offering best quality products to their clients, at the most competitive prices.

(ii)The Raw Edge business model finds its origin in organizing the inefficiencies of the industrial raw materials supplies. The supply of industrial raw materials involves research & development, exploration, mining, processing, logistics and IT enabling and company promoters foresaw the inefficiencies in the unorganized industrial raw materials sector and decided to work on this.

(iii) In the FY 2006-07, the company foreseen the potential use of Lime products and its demand, as a results, they initially started trading in Lime Fines, Limestone, Ferrous Sulphate, Quartzite, Dolomite. Later on, In the year FY 2009-10 company setup its first Calcium Lime crushing plant in Surat.

(iv) The Company has a setup with 1000 Trucks which are GPS enabled to supply the Raw material from factories to suppliers.

(v) In 2013-14, the company bought a land on lease for a period of 9 years and shifted the entire operation from Surat plant to this plant and enhanced its manufacturing capacity to 60,000 MT/Annum. Recently in Feb 2018, the Company has started a process of acquiring a new land in Surat for setting up manufacturing unit of crushed Quick Lime and Hydrated Lime with an installed capacity of 1,20,000 MT/per annum . This will help them to enhance their manufacturing capacity from 60,000 MT/Annum to 1,20,000 MT/Annum.

Raw Edge Industrial Solutions Limited IPO Stock Quote & Charts

72.00

-0.21%

  • Open: 71.90
  • High - Low: 72.15 - 71.90
  • Previous Close: 72.15
  • Total Traded Volume: 254400
  • Updated On: 20-Jul-2018

Objects of the Raw Edge Industrial Solutions Limited IPO:

Objective of

Raw Edge Industrial Solutions Limited IPO

are: The issue comprises of OFS of 6,10,000 and Fresh Shares of 16,81,200 Equity Shares. The Fresh Issue will be utilized for 1. Expansion by setting up Manufacturing Unit 2. Working Capital Margin 3. General Corporate Purpose 4. Meeting Public Issue Expenses.

Raw Edge Industrial Solutions Limited IPO Details:

Open Date: Jul 05 2018
Close Date: Jul 10 2018
Total Shares: 22,91,200
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price Issue
Issue Size: 16.4966 Cr.
Lot Size: 2000 Shares
Issue Price: ₹ 72 Per Equity Share
Listing At: BSE SME
Listing Date: Jul 18 2018

Promoters And Management:

Promoters of Raw Edge Industrial Solutions Limited Company are: (i) Mr. Bimal Rajkumar Bansal, aged 57 years, Managing Director of our company and is Bachelor of Arts from Kurukshetra University, Haryana. He has a vast experience of more than 30 years in the fields of Textile, Chemicals, Minerals and related businesses. He has been awarded as the “Highest Textile Exporter of the year” by the then President of India Mr K.R. Narayanan. (ii) Mr Sourabh Bimal Bansal, aged 34 years, non-executive director, is an IIT-Kharagpur alumnus, having earned his B-Tech & M-tech degree from the institute. He is also the Managing Director of Magicrete Building Solutions Pvt. Ltd (Magicrete), a company in which private equity fund was arranged by Motilal Oswal Private Equity Fund. Under his leadership, Magicrete has grown to become one of the renowned AAC Blocks manufacturers in the country with revenues in excess of 100 cr. He also holds a leadership position in Association of AAC Blocks manufacturers of India. He had received ET-Now "Best Brand Award" for our group company "Magicrete Building Solutions Private Limited (iii) Mr Siddharth Bimal Bansal, aged 33 years, non-executive director, is an IIT-Delhi alumnus, having earned his BTech from the institute. He also holds PGDM degree from IIM-Lukhnow, one of the premier management institute in India. He is the Promoter & Director of our company and brings his tremendous energy, innovation, and forward vision to the company. He is Executive Director in Magicrete Building Solutions Pvt. Ltd (Magicrete), a company in which private equity fund was arranged by Motilal Oswal Private Equity Fund Early in his career, he worked as a consultant at Mckinsey Company, a leading strategic consultancy company in the world and a leading private equity fund. He was awarded Tata business leadership award by Mr Ratan Tata, Chairman, Tata Sons. He was also nominated for O.P. Jindal scholarship in IIM Lukhnow.

Company Business:

Let us understand the business Model (i) The company is in the business of manufacturing and trading of Calcium Lime products and trading into various minerals such as Hydrated Lime, Lime Stones Chips, Dolomite, Quartzite, Plaster of Paris. (ii) Then with the help strong tie-ups with the group of 1000 Trucks, the raw material is being transported to various customers spreaded over 10 states, though major supply of the products are concentrated in the state of Gujarat and Rajasthan (contributing 91.37 % of total turnover). Let us understand the Risk in the business The only risk we have found is that the company is planning to setup a new manufacturing of 1,20,000 MT/Annum Capacity unit at Surat for which they have already paid 46 Lacs to the seller out of total cost of 50 lacs. However, the said land is still agriculture and if not converted into non-agriculture in due course may impose risk for the company as they will have to first recover money and second have to finalize a new site which may affect their growth.

Capital Structure:

(i) Authorized Share Capital 90,00,000 shares at FV@10) 9 Cr
(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue (67,00,800 Shares at FV@10) 6.70 Cr
(iii) Present Issue ( 22,91,200 Equity Shares at @FV@10) 2.291 Cr
(iv) Fresh Issue of 16,81,200 Equity Shares @FV=10. 1.681 Cr
(v) OFS of 6,10,000 Equity Shares @FV=10 6.10 Lacs
(vi) Reservation for Market Maker [1,15,200] Shares at FV@10) 11.5 Lacs
(vii) Net Issue to Public[ 22,91,200-115200]= 21,76,000 2.176 Cr
(viii) Reservation for QIB & HNI[10,88,000 ] Shares at FV@10) 50%
(ix) Reservation for Retail  [10,88,000 ] Shares at FV@10) 50%
(x Paid Up Share Capital after the issue 8.381 Cr

Financials of Raw Edge Industrial Solutions Limited IPO as per DRHP:

1. Assets and Liabilities Key Parameters
Year Asset(lacs) Liabilities (lacs) Net Worth(lacs) Book Value D/E [<1.5] RONW Debtor Days
FY13 774 496.63 277.37 45.0 1.79 29% 32
FY14 1,377.22 968.14 409.08 54.4 2.37 17% 71
FY15 1,488.56 1036.51 452.05 60.1 2.29 10% 69
FY16 2,305.11 1744 561.11 67.0 3.11 10% 120
FY17 2,718.57 2093.32 625.25 74.6 3.35 10% 131
FY18 2,912.26 2156.13 756.13 90.3 2.85 18% 145
Post Issue 1,966.594 23 1.1
2. Profit n Loss Key Parameters
Year Revenue(lacs) PAT(lacs) EBITDA Margins Profit Margins Outstanding Shares(lacs) EPS
FY13 6,662.21 81.5 3.0% 1% 6.166 13.22
FY14 3,349.57 70.41 6.0% 2% 7.526 9.36
FY15 3,826.82 44.71 6.0% 1% 7.526 5.94
FY16 4,133.55 58.05 6.6% 1% 8.376 6.93
FY17 4,860.73 61.63 6.5% 1% 8.376 7.36
10MFY18 4,498.74 133.4 8.6% 3% 8.376 15.93
Post Issue 160.08 83.82 1.91
3. Cash Flow Statement(all figures in lacs)
Particulars FY18 FY17 FY16 FY15 FY14 FY13
(i) Net Cash Generated from Operation 212.93 207.08 -179.76 363.24 208.81 99.42
(ii) Net Cash Generated from Investment -20.01 -117.22 -93.3 -108 -480.01 -11.73
(iii) Net Cash Generated from Financing Activity -189.87 -92.07 273.1 -259.74 276.64 -97.01
(iv) Total[ (i)+(ii)+(iii) ] 3.05 -2.21 0.04 -4.50 5.44 -9.32
(v) Cash and Cash Equivalents at the Start of the Year 1.48 3.69 3.66 8.16 2.71 12.03
(vi) Cash and Cash Equivalents at the end of the Year 4.53 1.48 3.70 3.66 8.15 2.71
Key Notes: a) The Revenue is growing at CAGR of 12.50% from FY14 to FY18. b) The PAT is growing at CAGR of 18% from FY14 to FY18. c) The Annualized EPS for FY17-18 would be 1.92 d) P/E(post issue)= 37.5 at Cutoff price of 72[ Very High for SME] e) P/B(post issue)= 3.13 at cutoff price of 72[ High for SME] f) The company has total debt of around 11 Cr[Short term= 8 cr and long term =3 cr) on a equity of 7.3 Cr which is bit on higher side. g) Mcap/Sales(ideally <2)= 1.13 on FY18 sales( Ideal).The Company has M.Cap of 60 Cr with Annualized sales of FY18 at 53 Cr. h) The Company's EBITDA Margins has improved overs the years from 3% in FY13 to 8.62% in FY18.(Positive Sign). i) The Company has positive cash flows from operations in last 5 years except in FY16- (Positive Sign.)

Comparison With Peers:

Name of the Company FV Mcap(cr) EPS P/E Profit Margins RONW Mcap/sales
Raw Edge Industrial Solutions Limited 10 60 1.92 37 3% 18% 1.13
Sanginita Chemicals Limited[SME] 10 135 0.65 120 0.76% 4.14% 0.92
India Gelatin and Chemicals Limited 10 60 2.9 30 2.32% 2.29% 0.59
Meghmani Organics Limited 10 2037 3.03 26 5.90% 8.00% 1.58
Note: 1. The Financials of Sanginita Chemicals Limited is taken as on FY17. However, for other companies data as on FY18 is taken. 2. The Price to calculate P/E is based on closing price of 06.07.2018.

Recommendation on Raw Edge Industrial Solutions Limited IPO:

Raw Edge Industrial Solutions Limited IPO Rating by InvestorZone team => 4/10 We believe the issue is aggressively priced as compared to its peers. 1-5: Fair 5-7: Good 7-10: Excellent

Lead Manager of Raw Edge Industrial Solutions Limited IPO:

  1. Guiness Corporate Advisors Private Limited

Registrar of Raw Edge Industrial Solutions Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Raw Edge Industrial Solutions Limited Shop No. 47, Ground Floor, City Mall, New Link Road, Andheri (W), Mumbai -400053 Phone No. 91-72269 96805 Website: www.rawedge.in E-Mail: info@rawedge.in

Bid Details of Raw Edge Industrial Solutions Limited IPO as on
10 Jul 2018 | 11:58:03 PM

Category No.of shares offered No. of shares bid
1,088,000 1,548,800
1,088,000 851,200
115,200 115,200
2,291,200 2,515,200
QIBs Yes
QIBs+HNIs Subscription 1.41X
Retail Subscription 0.78X
Total Subscription 1.05X

Discussion on Raw Edge Industrial Solutions Limited IPO:

    Hi Sheetal, Can we have the transcript of your conversation with the promoters, so that all group members can get benefit from this.

    Extremely glad to have had an opportunity to interact with the promoters… Shri Bimal Bansal has a very dynamic personality, always striving to learn and excel. The team is young and energetic- a very good and rare combination of business experience and academic excellence.