Rolex Rings IPO

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(i). Rolex Rings is one of the top five forging companies in India and a manufacturer and global supplier of hot rolled forged and machined bearing rings, and automotive components for segments of vehicles including two-wheelers, passenger vehicles, commercial vehicles, off-highway vehicles, electric vehicles), industrial machinery, wind turbines, and railways, amongst other segments.

(ii). Their product portfolio includes a wide range of bearing rings, parts of gearbox, and automotive components, among others. Its manufacturing capabilities are complemented by its tool design, engineering, and product development capabilities.

(iii). To date, it has offered a diverse range of hot forged and machined alloy steel bearing rings weighing from 0.01 kilograms to over 163 kilograms, and with an inner diameter of 25 millimeters to the outer diameter of 900 millimeters. This makes their products suitable for a wide range of end-user industries such as automotive, railways, industrial infrastructure, renewable energy, among others.

(iv). For Fiscal 2020, it supplied bearing rings and automotive components to over 60 customers in 17 countries, primarily located in India, the United States of America, and in European countries such as Germany, France, Italy, and the Czech Republic, and Thailand.

(v). The company is in the process of expanding the capacity of its solar projects by an installed capacity of 12 MW and has already placed purchase orders for equipment with an installed capacity of 7.35 MW.

Competitive Strengths
i. Comprehensive product portfolio
ii. Long-standing customer relationships
iii. Experienced Promoters and management
iv. Strong financial performance

Objects of the Rolex Rings IPO:

Offer for Sale : 7,500,000 Shares The proceeds from the Offer for Sale (net of Offer related expenses to be borne by the Selling Shareholder) shall be received by the Selling Shareholder and the Company shall not receive any proceeds from the Offer for Sale. Fresh Issue : 6,22,222 Shares 1. Funding long-term working capital requirements; and 2. General corporate purposes.
DRHP of Rolex Rings IPO
RHP of Rolex Rings IPO

Rolex Rings IPO Details:

Open Date: Jul 28 2021
Close Date: Jul 30 2021
Total Shares: 8122222
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Building
Issue Size: 731 Cr.
Lot Size: 16 Shares
Issue Price: ₹ 880 - 900 Per Equity Share
Listing At: NSE,BSE
Listing Date: Aug 09 2021

Promoters And Management:

(i). Manesh Dayashankar Madeka, is the Chairman and Managing Director. He together with Rupesh Dayashankar Madeka started the business under the partnership firm by the name of Rolex Industries in 1978. He has over 40 years of work experience in marketing, production, and finance. (ii). Bhautik Dayashankar Madeka, is the Whole Time Director. He holds a bachelor’s degree in commerce from Ranchi University, Ranchi. He has over 18 years of work experience in production, planning, and control. He joined the company on December 31, 2002, when it was still a partnership firm. (iii). Mihir Rupeshkumar Madeka, is the Whole Time Director. He holds a bachelor’s degree in engineering from Nagpur University. He has over 18 years of work experience in marketing functions and in the development of new customers and products. He joined the Company on December 31, 2002, when it was still a partnership firm. (iv). Vivek Sett, is the Nominee Director. He has been admitted as an associate of The Institute of Chartered Accountants of India. He was previously associated with Ispat Industries as its director (commercial) and Tata Realty & Infrastructure, Tata Teleservices Limited, and Hughes Telecom (India) Limited as their chief financial officer. He is currently a Partner at New Silk Route Advisors.

Financials of Rolex Rings IPO:

 
Particulars (in Cr.) Mar-21 Mar-20 Mar-19 Mar-18
Sales 619 665 904 784
Cost of Material Consumed 316 313 452 371
Change in Inventories -5 15 -19 -7
Excise Duty on Sale of Goods 0.00 0.00 0.00 14.16
Employee Benefits Expense 51 52 60 54
Other Expenses 168 162 208 190
Operating Profit 89 121 201 161
OPM % 13.83% 18.23% 22.24% 20.54%
Other Income 4 10 7 7
Interest 2 32 42 50
Depreciation 12 26 25 23
Profit before tax 14 72 140 94
Total Tax Exps -11 20 82 22
Net Profit 86 53 59 72
NPM % 11.27% 7.95% 6.53% 9.29%
No. of shares 2.73 2.40 2.40 2.40
EPS in Rs 31 22 24 30
 

Comparison With Peers:

Name of the company 3-year Revenue Growth 3 year PAT Growth EBITDA Margin (FY20) ROE  (FY20) Debt to Equity P/E 3 Years Return
Rolex Rings Ltd -5% -10% 18% 19.75% 0.88 - -
Bharat Forge Ltd -15% -23% 13% 1.46% 0.90 480.40 9.78%
Ramkrishna Forgings Ltd -13% -44% 17% 2.35% 1.29 119.21 8.81%
Mm Forgings Ltd -7% -17% 17% 9.62% 1.06 37.91 5.07%

Recommendation on Rolex Rings IPO:

Review and Recommendation of Rolex Ring IPO from InvestorZone is 5/10 1. The company's top-line is not growing. The reason is the slowdown in the automobile sector to which company provides bearing and other components. 2. The PAT looks good in 2021 but that is due to deferred tax calculation otherwise the performance is very weak due to COVID-19. 3. Asking price is at P/E of 31x which looks reasonable priced.

Lead Manager of Rolex Rings IPO:

  1. Equirus Capital Private Limited
  2. IDBI Capital Market Services Limited
  3. JM Financial Consultants Private Limited

Registrar of Rolex Rings IPO:

  1. Link Intime India Private Limited

Company Address:

Near Kotharia Railway Crossing, Opposite Hotel Krishna Park, Gondal Road, Kotharia, Rajkot, Gujarat 360 004

Discussion on Rolex Rings IPO:

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