Rajputana Stainless IPO Set to Launch: A Review of the Company's Prospectus and Key Investment Considerations

Rajputana Stainless Ltd Initial Public Offering

Key Details

• Price Band: ₹116-122 per share
• IPO Size: Up to 1.46 crore equity shares (fresh issue) and up to 62.5 lakh shares (offer-for-sale by promoter Shankarlal Deepchand Mehta)
• IPO Period: March 9-11, 2024
• Funds Raised: ₹255 crore at the maximum price point

Objective

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The funds raised from the new issue will be utilized to establish a manufacturing facility in Panchmahal district, Gujarat, broaden the product range, pay off existing debt, and address general corporate needs.

Business Overview

Rajputana Stainless Ltd is a stainless steel manufacturer founded in 1991. The company specializes in the production of long and flat stainless-steel items, providing a variety of products across more than 80 different grades. Its products are mainly marketed within the country through direct sales and a network of traders, with exports to nine countries.

Financial Highlights

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• FY25 Operational Revenue: ₹932 crore (up from ₹910 crore in FY24)
• FY25 Net Profit: ₹40 crore (up from ₹31.6 crore)

Peer Comparison

The company's listed peers include:

• Mangalam Worldwide Ltd: P/E of 22.57
• Mukand Ltd: P/E of 26.34
• Electrotherm Ltd: P/E of 3.16
• Panchmahal Steel Ltd: P/E of 182.18

Risk Factors

The company's operations are susceptible to local conditions and economic declines in the area, with a notable segment of sales stemming from Maharashtra, Gujarat, and Uttar Pradesh.