IPO Corner: Rishabh Instruments Limited

Rishabh Instruments Limited
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Rishabh Instruments Limited has fixed the price band at ₹418 to ₹441 per Equity Share for its initial public offer. The offering of the Company will open on Wednesday, August 30, 2023, for subscription and closes on Friday, September 01, 2023. Investors can bid for a minimum of 34 Equity Shares and in multiples of 34 Equity Shares thereafter.

  • Wednesday, August 30, 2023
  • Closing Date – Friday, September 01, 2023.
  • Price band at ₹418 to ₹441 per Equity Share
  • Face value of ₹10 each
  • Bid Lot is 34 Equity Shares and in multiples

The IPO of face value of ₹10 per Equity Share comprises of fresh issuance of equity shares worth Rs 75 crore and an Offer for Sale (OFS) up to 9.43 million equity shares.

Rishabh Instruments Limited is a global energy efficiency solution company, with its corporate office in Nashik, Maharashtra, and focused on electrical automation, metering and measurement, precision engineered products and aluminium high pressure die castings with diverse applications across industries including power, automotive and industrial sectors.

Narendra Joharimal Goliya founded Rishabh Instruments in the year 1982 and has over 4 decades of experience in the electrical and electronic instruments industry. The company supplies a wide range of electrical measurement and process optimization equipment and engages in the design, development, manufacturing, and sale of devices significantly under its own brand across several sectors.

It is a vertically integrated player involved in designing, developing, manufacturing and supplying electrical automation devices; metering, control and protection devices; portable test and measuring instruments; and solar string inverters. Additionally, through its subsidiary, Lumel Alucast, it manufactures and supplies high pressure die cast aluminum components to the automation and automotive industry mainly in Europe.

According to the F&S report mentioned in the Red Herring Prospectus, the Company is a global leader in the manufacture and supply of analog panel meters and is also one of the leading global manufacturers and suppliers of low voltage current transformers. For meters, controllers, and recorders, Lumel is the most popular brand in Poland, and Lumel Alucast is one of the leading non-ferrous pressure casting players in Europe.

Rishabh Instruments’ revenue from operations increased by 21.11% from Rs 470.25 crore in Fiscal 2022 to Rs 569.54 crore in Fiscal 2023, primarily driven by increase in revenue from sale of goods and from sale of services, whereas profit grew to Rs 49.69 crore in Fiscal 2023, as compared to Rs 49.65 crore in Fiscal 2022.

Risks to Investors

  1. It is dependent on its Poland Manufacturing Facility II and in Fiscals 2023, 2022 and 2021, it manufactured 62.73%, 58.25% and 59.18%, respectively, of the total products with a capacity utilisation of 73.70%, 64.81% and 66.95%.
  2. Management proposes to utilise ₹ 628.86 million of the Net Proceeds of the Offer towards Expansion of Nashik Manufacturing Facility I and not entered into any definitive arrangements to utilise certain portions of the Net Proceeds of the Offer.
  3. In Fiscals 2023, 2022 and 2021, revenue from top 10 customers were ₹ 1,817.91 million, ₹ 1,128.04 million and ₹1,030.39 million, respectively, representing 31.92%, 23.99% and 26.42%, respectively, of total revenue from operations.
  4. One of, in April 2022, issued a legal notice to Company for alleged failure to adhere to their quality standard and technical hurdles faced in relation to the certain products supplied by Company and have thereafter, ended their association/ relationship.
About the author: IE&M Team
IE&M Team
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