Rishabh Instruments ends with flat listing gains after a volatile trade

• The stock debuted at ₹460 with a 4% premium to its IPO price of ₹441.
• The grey market was expecting 15% gains from the stock.
• Its market capitalization is ₹1,537 crore, as per BSE.

The stock of Nashik-based Rishabh Instruments made its market debut at ₹460 on the bourses on Monday – with a 4% premium to its IPO price of ₹441. However, it fell around during the day, ending with flat listing gains of 0.18%.

The grey market had expected listing gains of 15%. Its market capitalization is ₹1,677 crore, as per BSE.

The ₹490.7 crore initial public offer was subscribed 31.65 times the shares on offer on the last day of the issue. Qualified institutional buyers (QIBs) bid aggressively for the shares and their portion was subscribed by 72.5 times over the shares on offer.

The price band for the IPO was fixed at ₹418-441 per equity share. The company provides energy efficiency solutions, and supplies a wide range of electrical measurement and process optimization equipment to a variety of industries.

Here are the listing gains of the last six market debuts


‘Listing gains to be tepid’

Most analysts believe that the IPO offers investors an opportunity to invest in a global leader in energy efficiency products, but believe that it’s expensively priced.

SBI Securities says that its valuations are stretched taking into consideration weak cash flows and low return ratios. “However, being a unique business, the business may command a scarcity premium and long-term investors are recommended to subscribe to the issue. Listing gains are likely to remain tepid,” it said.

Prashanth Tapse, research analyst and senior VP research at Mehta Equities said that the issue is asking for a marketcap of ₹1,674 crore with price to earnings ratio (P/E) of 33.69x on consolidated basis.

“It sees the issue is fully priced-in looking at growth and expected outlook. We are inclined to recommend risk taking investors to ‘Subscribe with Risk’,” Tapse added.

Arihant Capital however believes that Rishabh Instruments' IPO presents an opportunity to invest in a well-established company with a history of growth and innovation. “We are recommending ‘Subscribe for listing gains’ for this issue,” he said.

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.

The company raised ₹147 crore from anchor investors like HDFC Mutual Fund, Nippon India Mutual Fund, Sundaram Mutual Fund, Tata Mutual Fund and more.

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.