Rashi Peripherals Limited’s IPO is set to open for subscription on February 7, 2024. Company distributes global technology brands in India. This article will provide details about the Rashi Peripherals IPO, including information about the company, its financials, IPO valuation, Grey Market Premium (GMP), as well as a review and analysis.
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Rashi Peripherals IPO Details
| IPO Opening Date | 07-Feb-24 |
| IPO Closing Date | 09-Feb-24 |
| IPO Listing Date | 14-Feb-24 |
| Issue Type | Book Built Issue IPO |
| Face Value | Rs 5 per equity share |
| IPO Price band | Rs 295 to Rs 311 per equity share |
| Lot Size | 48 Shares |
| Listing at | BSE and NSE |
| Total Issue Size | Rs. 600 Crores |
About Rashi Peripherals Limited
They are among the leading national distribution partners for global technology brands in India for information and communications technology (ICT) products in terms of revenues and distribution network in Fiscal 2023.
They are also one of the fastest growing national distribution partners for global technology brands in India in terms of revenue growth between Fiscal 2021 and Fiscal 2023.
Its revenue from operations grew at a CAGR of 26.32% from ₹ 59,250.48 million in Fiscal 2021 to ₹ 94,542.79 million in Fiscal 2023 and were ₹ 54,685.10 million in the six months ended September 30, 2023.
They differentiate ourselves by offering end-to-end services such as pre-sale activities, solutions design, technical support, marketing services, credit solutions and warranty management services.
Rashi Peripherals Limited Financial Summary
| Financial Year ending / Period ending (Amt in Crores) | ||||
| Period Ended | 31-Mar-21 | 31-Mar-22 | 31-Mar-23 | 30-Sep-23 |
|---|---|---|---|---|
| Assets | 1,594.39 | 2,669.76 | 2,798.60 | 4,058.64 |
| Revenue | 5,930.24 | 9,321.92 | 9,468.95 | 5,473.27 |
| Profit After Tax | 136.35 | 182.51 | 123.34 | 72.02 |
| Net Worth | 394.19 | 575.07 | 700.12 | 772.74 |
| Reserves and Surplus | 395.99 | 557.84 | 760.36 | 686.24 |
| Total Borrowing | 488.99 | 881.74 | 1,065.76 | 1,395.20 |
Rashi Peripherals IPO Valuation
- The IPO price band is Rs 295 to 311 per share
- If we consider last 3 years weighted EPS of Rs 34.47, the P/E ratio works out to be 9x
- If we consider the last year FY23 EPS of Rs 29.5, the P/E ratio works out to be 11x
- If we annualise 6 months ended Sep-23 EPS, the P/E ratio works out to be 9x
- There is only listed peer – Redington India Limited trading at P/E 10x. Hence, the IPO Price band at P/E of 11x to 9x is fully priced.
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Rashi Peripherals IPO GMP (Grey Market Premium)
- According to IPO Watch, the Grey Market Premium (GMP) for Rashi Peripherals Hotels IPO stands at Rs 25.
- Data from Investorgain indicates a fluctuation in the GMP, rising from 0 to Rs 25 in the last couple of days.
Rashi Peripherals IPO – Positive Aspects
- Company is the leading and fastest growing Indian distribution partner for information and communications technology products.
- It has long-term relationships with marquee global technology brands supported by committed engagement strategy with customers.
- Company has diversified and comprehensive product portfolio and solutions with scalable business model supported by advanced technology stack.
- Strong revenue growth in the last few years.
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Rashi Peripherals IPO – Risk Factors
- Company is dependent on various vendors, who are global technology brands, for the products they distribute which is over 82% of its revenue from operations. Any delay or failure on part of such global technology brands to supply products may materially and adversely affect its business.
- Its business is dependent on global technology brands effectively maintaining, promoting or developing their brands and maintaining standard quality products including launching new information and communications technology products at regular intervals.
- If company is unable to maintain its relationships with their Channel Partners or customers or if any of these parties change the terms of their arrangements with them, its business could be materially and adversely affected.
- Its gross margins are low, which magnifies the impact of variation in revenue, operating costs, bad debts and interest expense on its operating results
- They are reliant on its relationships with certain online market places and disruptions to such relationships or changes in their business practices, may adversely affect its business.
- They have witnessed negative cash flows in the past.
- Its EBITDA Margin was 3.63% in FY2021, which decreased to 3.28% in FY2022 and further to 2.83% in FY2023. There can be no assurance that they will be able to maintain its EBITDA Margin in future.
- Investors should go through all risk factors indicated in IPO RHP
Rashi Peripherals IPO Review and Conclusion
- Rashi Peripherals Limited distributes global technology brands in India. Its service offerings include value-added services such as pre-sales, technical support, marketing services, credit solutions and warranty management service. Company has strong revenue growth in the past.
- On the negative side, company is dependent on vendors which are global technology brands. Company margins have been in declining mode. It experienced negative cash flows in the past.
- It has only one listed peer and compared to their P/E, the issue is fully priced.
Investors who understand all the risk factors can invest in this IPO.
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