Rishabh Instruments’ IPO to open on August 30; price band at ₹418-441 per share

• Rishabh Instruments fixed the price band for its IPO at ₹418-441 per equity share.
• Investors can bid for a minimum of 34 equity shares and in multiples of the same.
• The company intends to raise anywhere between ₹469-490 crore.
  

Nashik-based Rishabh Instruments said on Friday that its initial public offering (IPO) will open on August 30 and close on September 1. It has fixed the IPO price band at ₹418-441 per equity share.

Investors can bid for a minimum of 34 shares and in multiples of 34 shares thereafter.

The company provides energy efficiency solutions, and supplies a wide range of electrical measurement and process optimization equipment to a variety of industries.

The public issue of face value of ₹10 per equity share comprises a fresh issue of ₹75 crore and an Offer for Sale (OFS) up to 9.43 million shares by promoter and promoter group.

The company intends to raise anywhere between ₹469-490.7 crore. The net proceeds from the offer will be utilised towards the expansion of its Nashik facility.

DAM Capital Advisors, Mirae Asset Capital Markets and Motilal Oswal Investment Advisors are the book running lead managers of the issue while KFin Technologies is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.

About the company

The company founded by Narendra Joharimal Goliya, has over 40 years of experience in the manufacturing and electrical industry. Its energy efficiency solutions include automation, metering and measurement, precision engineered products and others to industries like power, automotive and industrial sectors.

It engages in the design, development, manufacturing, and sale of devices under its own brand. It is a vertically integrated player involved in designing, developing, manufacturing and supplying electrical automation devices, control and protection devices; portable test and measuring instruments; and solar string inverters.

Through its subsidiary, Lumel Alucast, it manufactures and supplies high pressure die cast aluminium.

Financials and risk factors

In the last financial year, its income grew 21% from the year before, while its profit after tax remained flat.

Source: DRHP

Apart from business, manufacturing risks and forex fluctuations owing to exports, the company cited environment and regulatory issues as risk factors that can affect its business. Its dependent on its Poland manufacturing facility II and in it manufactured over 58% of the total products in the last three years.

The expiry or early withdrawal of financial benefits available to its Nashik manufacturing facilities may adversely affect its business.

“We are unable to trace some of our historical records including forms filed with the RoC and there are certain discrepancies in records available with us as well as our filings with the RoC,” the company said in its DRHP.

The company added that there have been certain instances of non-compliances, including with respect to certain secretarial/ regulatory filings for corporate actions in the past. Consequently, they may be subject to regulatory actions and penalties.

The company also said it might not be able to replicate our previous success in the new industries, and its efforts to obtain and protect its patents, trademarks and other IP may be costly and unsuccessful. Added to that, its manufacturing, production and design processes and services may result in exposure to IPR infringement and other claims.

Its directors or key managerial personnel may have interests in the company other than reimbursement of expenses incurred or normal remuneration or benefits. Its promoter has provided a personal guarantee for a portion of its borrowings and if they are revoked it can affect its business.

The company has entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders. The company and its subsidiary has three statutory and regulatory actions and two material civil litigation against them. Its promoters and directors have four tax proceedings against them.