Rolex Rings IPO : Should you subscribe?
The Rolex Rings IPO opens for subscription on 28th July 2021.
About Rolex Rings
Rolex Rings was incorporated in 2003. It is one of the top forging companies in the country. Manufacturer and global supplier of hot rolled forged, machined bearing rings, and automotive components, which have applications in a wide range of end-user industries such as automotive, railways, industrial infrastructure, renewable energy, among other segments.
The company is one of the key manufacturers of bearing rings in India and caters to most of the leading bearing companies in the country. Along with India, the company supplies its components in 17 countries, such as the USA and in European countries such as Germany, France, Italy, and the Czech Republic, and Thailand among others. Also read Investment lessons from Dhoni
Rolex Rings IPO details
Size of IPO : ₹731 crores (₹56 crores fresh issue ; ₹675 crores Offer for Sale)
Subscription dates : 28th July 2021 to 30th July 2021
Price Band : ₹880-₹900
Lot size : 16 shares
Value of 1 lot : ₹14,400/-
Maximum lots per person : A retail investor can apply for 13 lots. This would cost ₹187,200
What do experts say about the IPO?
“RRL serves 60 customers across 17 countries and is one of the key suppliers for leading bearing manufacturers. The company’s comprehensive product portfolio catering to auto, industrial, infra & renewable segments and longstanding customer relationship gives credence to the quality and sustainability of RRL’s products. As the industrial segment picks up led by increased capex spend by public and private sector coupled with a recovery in auto sector, RRL should see strong traction from bearing manufacturers. The bearing clientele of RRL constitutes ~80% of the total market. Hence, this ensures strong traction for RRL once the tide turns.” – ICICI Direct Research
“As for Rolex Rings Ltd, the revenues for most listed peers and the company have declined over the past four years but the company has generated better ROEs on account of better Asset Turnover. The company has a long-standing relationship with existing clients and the with newer products, it should be able to increase the share from existing customers. Based on the price band of Rs880-900, the company is seeking PE of ~39x without considering the tax credit of ~Rs25 crores, which is reasonable given its strong return ratios. ~55% of revenue comes from outside India and considering potential rebound in demand from user industries, we have a positive outlook on Rolex Rings Ltd IPO as well.” – Angel Broking
The revenue has dipped significantly from ₹911 crores in 2019 to ₹619 crores in 2021. However, the Profit after Tax (PAT) had increased from ₹59 crores to ₹86.96 crores over the same period.
Rolex Rings IPO : Should you subscribe
Considering the dominance of the company and it’s healthy financials, several analysts have assigned a “SUBSCRIBE” rating to this IPO. Moderate listing gains too can be expected.
You can apply for the IPO here