Rishabh Instruments IPO – Detailed Analysis
Rishabh Instruments Limited is gearing up for its IPO, scheduled to open for subscription from August 30, 2023, to September 1, 2023. As an investor, you might be wonder whether this IPO is worth investing or not. In this article, we’ll provide a comprehensive overview of Rishabh Instruments Limited’s IPO, including details, dates, positive and negative factors, and a thorough review.
About Rishabh Instruments Limited
Rishabh Instruments Limited, established in 1982, is a renowned player in the manufacturing, design, and development of Test and Measuring Instruments and Industrial Control Products. Their product range spans across various solutions designed to measure, control, record, analyze, and optimize energy and industrial processes.
Moreover, Rishabh Instruments specializes in offering aluminum high-pressure die-casting solutions and precision machining services. These services cater to clients in sectors such as automotive compressor manufacturing and automation high-precision flow meters manufacturing.
One pivotal move in the company’s history was the acquisition of Lumel Alucast in 2011, a non-ferrous pressure casting company in Europe. This strategic acquisition bolstered the company’s manufacturing and supply capabilities, particularly in the low-voltage current transformers market.
- Rishabh Instruments operates in four distinct segments:
- Electrical Automation Devices
- Metering, Control, and Protection Devices
- Portable Test and Measuring Instruments
- Solar String Inverters
The company’s global presence is significant, with three manufacturing units and an extensive network of over 270 dealers spanning 70+ countries. In India alone, Rishabh Instruments is served by 150+ dealers covering every state.
Rishabh Instruments IPO Details
- Type: Book Built Issue
- Total Issue Size: Rs 490.78 Cr
- Price Range: ₹418 to ₹441 per share
- Lot Size: 34 Shares
- Total Issue Size: 11,128,858 shares
- Fresh Issue: 1,700,680 shares
- Offer for Sale: 9,428,178 shares
- Listing Exchanges: BSE, NSE
What about company financials?
|Financial Year ending / Period ending (Amt in Crores)|
|Profit After Tax||35.9||49.7||49.7|
Positive Factors to invest in Rishabh Instruments IPO
- Diverse Product Portfolio: Rishabh Instruments boasts a wide range of products across multiple segments, making it resilient to market fluctuations in any one sector.
- Global Presence: With a strong international presence and an extensive dealer network, the company is well-positioned to tap into global markets.
- Strategic Acquisition: The acquisition of Lumel Alucast in 2011 bolstered the company’s capabilities in manufacturing and supply, diversifying its product offerings.
- Steady Financial Growth: The company has demonstrated consistent revenue and profit growth over the years, reflecting its strong fundamentals.
- Market Potential: Given the increasing demand for energy-efficient solutions and automation in various industries, Rishabh Instruments is in a favorable position to capitalize on these trends.
Risk Factors of investing in Rishabh Instruments IPO
- Dependency on Manufacturing Facilities: Rishabh Instruments’ business heavily relies on its manufacturing operations. Any disruptions in these facilities could adversely impact the company’s operations and financial health.
- Overseas Dependency: The company’s reliance on its Poland Manufacturing Facilities exposes it to risks associated with international operations, including disruptions and regulatory changes.
- Unforeseen Delays: The expansion plans for the Nashik Manufacturing Facility may carry inherent risks related to unanticipated delays and cost overruns, potentially affecting the company’s financials.
- Customer Volatility: Most of Rishabh Instruments’ customers do not commit to long-term contracts, making its revenue stream susceptible to order cancellations or changes in sourcing strategies by customers.
- Quality and Liability Risks: Manufacturing defects or service deficiencies could lead to customer dissatisfaction, product liability claims, and damage to the company’s reputation.
Rishabh Instruments IPO Valuation
The IPO price range of ₹ 418 to ₹ 441 per share.
- Based on the weighted average EPS of ₹ 12.28, the P/E ratio for Rishabh Instruments IPO ranges from approximately 34.06 to 35.94.
- There are no peers in similar business, hence we cannot ascertain whether the issue price is under priced or over priced.
What experts are saying about this IPO?
Mr Dilip Davada, IPO expert writes on Chittorgarh indicating that Rishabh Instruments Limited is a global leader in energy efficiency solutions and precision engineering products with a substantial share of export revenue, acknowledges its strong market presence. However, considering the valuation based on FY23 earnings, he believes that the IPO as fully priced. Nevertheless, he suggests that well-informed investors who are comfortable with medium to long-term investment horizons might still find potential in RIL’s offerings.
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Rishabh Instruments IPO Review – Should you subscribe?
- Company’s strong global presence, diverse product portfolio, and steady financial growth make it as outstanding.
- However, investors should remain cautious about manufacturing dependencies, overseas operations, and unforeseen delays in expansion plans. The IPO price cannot be determined wehther under priced of over priced.
- High risk investors can invest in such IPOs.
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