Auto Components Maker Rolex Rings to Hit the Market on 28 July. Price Band Fixed at Rs 880-900

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  
  • Home
  • Views On News
  • Jul 26, 2021 - Auto Components Maker Rolex Rings to Hit the Market on 28 July. Price Band Fixed at Rs 880-900

Auto Components Maker Rolex Rings to Hit the Market on 28 July. Price Band Fixed at Rs 880-900

Jul 26, 2021

Rolex Rings, one of the top five forging companies in India in terms of installed capacity, will open its initial public offering (IPO) for subscription on 28 July 2021. The issue is set to close on 30 July 2021.

Based in Rajkot, Gujarat, Rolex Rings is among the leading manufacturers of forged and machined components in the country.

The Rs 7.3 bn IPO which will hit the market on Wednesday has a price band in the Rs 880-900 range.

Equirus Capital, IDBI Capital Markets & Securities, and JM Financial are the book running lead managers to the issue.

This would be 29th IPO in the current year 2021, and fifth in second half of CY21 after Clean Science, GR Infraprojects, Zomato, and Tatva Chintan Pharma Chem.

Rolex Rings IPO Details

Issue Type Book Built Issue IPO
Face Value Rs 10 per equity share
IPO Price Rs 880 to Rs 900 per equity share
Market Lot 1 lot - 16 shares
Issue Size Rs 7.3 bn
Fresh Issue Rs 0.6 bn
Offer for Sale Rs 6.7 bn
Basis of Allotment Date Wednesday, August 4, 2021
IPO Listing Date Monday, August 9, 2021
Data Source: Company's Red Herring Prospectus

The IPO comprises a fresh issue of Rs 0.6 bn and an offer for sale of Rs 6.7 bn that is up to 7.5 m equity shares by Rivendell PE LLC.

Rivendell PE LLC (formerly known as New Silk Route-PE Mauritius) held 41% stake in the company.

Promoters of the company are Rupesh Dayashankar Madeka, Jiten Dayashankar Madeka, Manesh Dayashankar Madeka, Pinakin Dayashankar Madeka, and Bhautik Dayashankar Madeka, having a shareholding of 48.8% at the time of filing red herring prospectus.

--- Advertisement ---
Automobile Sector's Colossal Disruption Could Make You a Fortune

During any major disruption in a sector, fortunes are created.

And now, we are at the cusp of a major disruption that the automotive sector will experience.

It is the electric vehicles gold rush.

At Equitymaster, we have unearthed a hidden way to ride the 15x EV opportunity so that you could take home potentially life-changing gains in the long run.

You can get all details of the hidden way in our upcoming special online event.

YES, Register Me for FREE

Category-wise reserved portion

A total of 35% of the quota is reserved for retail investors, 14% for high net worth individuals (HNIs), and the rest 50% for qualified institutional buyers (QIBs).

Investors can bid for a minimum of 16 shares and in multiples thereafter.

Fund usage

Proceeds from the fresh issue would be used towards funding long-term working capital requirements as well as general corporate purposes.

In addition, the company expects to receive the benefits of listing the equity shares on the stock exchanges, enhancement of its brand name among existing and potential customers, and the creation of a public market for its equity shares in India.

About Rolex Rings

Incorporated in 2003, Rolex Rings is among the top five forging companies in India.

The company manufactures hot rolled forged & machine bearing rings and automotive components that are used across segments - passenger vehicles, 2-wheelers, commercial vehicles, electric vehicles, off-highway vehicles, industrial machinery, wind turbines, railways, etc.

The company supplies its products in the domestic as well as international markets to automotive companies and leading bearing manufacturers such as SRF India, Schaeffler India, Timken India, etc.

In fiscal 2020, it has exported bearing rings and automotive components to 17 countries such as France, Italy, Germany, Thailand, Czech Republic, USA, and others.

Competitive strengths

  • Among the leading forging companies in India.
  • Strong manufacturing capabilities.
  • Comprehensive product portfolio.
  • Geographically diversified revenue base.
  • Strong and consistent financial performance track record.

--- Advertisement ---
The Rebirth of India

India's leading research analyst, Tanushree Banerjee, will show our readers how an upcoming mega shift would drastically change the state of the Indian economy...

And how investing in three high-potential stocks at the heart of this rebirth...

...could potentially hand them 100%, 300%, 500%, even 1,000% or more in the long run.

Since you are one of our valued readers, we sincerely urge you to head over here for more details

Financial snapshot of the company

For the fiscal-ended 31 March 2021, Rolex Rings reported a profit of Rs 869.5 m compared to Rs 529.4 m in the preceding fiscal.

Its revenues from operations stood at Rs 6.2 bn in 2020-21 as against Rs 6.7 bn in the preceding financial year.

The company derives major revenues from two sources - bearing rings and auto components.

Over the past three fiscals, both these sources have posted declining trends in revenues.

(Rs m) FY18 FY19 FY20 Sep-20
Revenues 7,915.4 9,112.5 6,753.3 2,254.6
Revenue Growth (%)   15.1% -26%  
Expenses 6,974.9 7,706.9 6,032.5 2,109.0
Profit Before Tax (PBT) 940.6 1,405.6 720.8 145.6
Net Profit 728.8 590.4 529.4 253.1
Data Source: Company's Red Herring Prospectus

The company has not declared any dividend for the last three fiscals. However, it will follow a prudent dividend policy based on financial performance and future prospects.

It's interesting to note that Rolex Rings defaulted on bank finance in the year 2013 and also delayed some of its repayments till the financial year 2019. This put pressure on the dividends announced by the company.

For more details, check out Rolex Rings' Red Herring Prospectus.

Comparison with listed peers

As per the offer documents, Rolex Rings has shown Bharat Forge, Ramkrishna Forge, and MM Forgings as its listed peers.

Company Revenues Net Profit Return on Net Worth (%)
Bharat Forge 80.6 3.9 7%
Ramkrishna Forge 12.2 0.1 1.1%
MM Forgings 7.7 0.4 9.2%
Rolex Rings 6.8 5.3 19.8%
Data Source: RHP, Equitymaster
Figures in Rs bn and as on 31 March 2020

An overview on company's current business

Currently, the firm has 3 manufacturing plants in Rajkot with 22 forging lines with an aggregated installed capacity of 144,750 m tonnes per annum (MTPA).

Its machining facilities consist of 528 spindles with a combined installed capacity of 69 m parts per annum.

Other machinery includes heat treatment furnaces, cold rolling machines and other infrastructure.

Join Today: Equitymaster is on Telegram. Join FREE Today for Exclusive market Updates

The company intends to de-risk its dependence on changes in power tariffs and reduce their carbon footprint through investment in renewable energy.

At present, it has windmills with installed capacity of 8.75 megawatt (MW).

The company is in the process of expanding the capacity of solar projects by an installed capacity of 16 MW and has already placed purchase orders for equipment with an installed capacity of 7.35 MW.

The proposed expansion is expected to help it reduce its carbon footprint and expanding profit margins.

Rolex Rings grey market premium?

As per market observers, Rolex Rings grey market premium (GMP) is at around Rs 530.

GMP is up 59% from the issue price of the IPO, which has been fixed at Rs 880 to Rs 900.

The grey market is an unofficial platform, wherein trading starts after the announcement of IPO price band till the listing of IPO shares.

What's the ideal IPO strategy to follow?

In the past few months, a large number of corporate houses have submitted proposals for floating IPO. Besides this, a number of IPOs are expected to hit the market soon.

As companies line up to raise funds from the market amid high valuations, investors need to consider numerous factors before investing their money in an IPO.

If you are investing in an IPO, weigh in all the positive and negative factors affecting the company.

Take a close look at the company's financials and valuations. It would give you a clear picture of what's brewing.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

Equitymaster requests your view! Post a comment on "Auto Components Maker Rolex Rings to Hit the Market on 28 July. Price Band Fixed at Rs 880-900". Click here!

1 Responses to "Auto Components Maker Rolex Rings to Hit the Market on 28 July. Price Band Fixed at Rs 880-900"


Jul 29, 2021

Any reason for stoppage of review and stoppages of definitive recommendation.

Equitymaster requests your view! Post a comment on "Auto Components Maker Rolex Rings to Hit the Market on 28 July. Price Band Fixed at Rs 880-900". Click here!

More Views on News

India's Top EV Battery Makers are set for Sky High Returns (Views On News)

Sep 30, 2021

These 5 leading EV battery makers are poised to transform India's EV ecosystem.

MINDA CORPORATION 2020-21 Annual Report Analysis (Annual Result Update)

Sep 6, 2021 | Updated on Sep 6, 2021

Here's an analysis of the annual report of MINDA CORPORATION for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of MINDA CORPORATION. Also includes updates on the valuation of MINDA CORPORATION.

JAMNA AUTO 2020-21 Annual Report Analysis (Annual Result Update)

Sep 6, 2021 | Updated on Sep 6, 2021

Here's an analysis of the annual report of JAMNA AUTO for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of JAMNA AUTO. Also includes updates on the valuation of JAMNA AUTO.

Sona Comstar IPO: Should You Apply? (Views On News)

Jun 14, 2021

All you need to know about Sona Comstar IPO.

BHARAT FORGE Announces Quarterly Results (1QFY22); Net Profit Up 229.0% (Quarterly Result Update)

Aug 16, 2021 | Updated on Aug 16, 2021

For the quarter ended June 2021, BHARAT FORGE has posted a net profit of Rs 2 bn (up 229.0% YoY). Sales on the other hand came in at Rs 21 bn (up 82.6% YoY). Read on for a complete analysis of BHARAT FORGE's quarterly results.

More Views on News

Most Popular

A Complete Guide for Beginners on How to Invest in IPOs

As an investor, you must have endeavoured to find a suitable opportunity for investing in IPOs. But do you know what is an IP...

Is it Time to Switch from Tata Power to NTPC? (Profit Hunter)

Oct 11, 2021

Given the huge run up in Tata Power, does it make sense to switch to NTPC?

This Proxy EV Stock Just got a Power Crisis Boost (Profit Hunter)

Oct 8, 2021

After months of research, I've come across few stocks that excite me far more than the mainstream electric vehicle companies.

Rs 1 Lakh Invested in These Cryptos at the Start of 2021 Became Rs... (Views On News)

Oct 8, 2021

These cryptos would have multiplied investors' wealth by as much as 10,000% in just nine months.

Top 5 'Digital India' Stocks (Views On News)

Oct 6, 2021

These companies are leading the Government's US$1 tn 'Digital India' initiative.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms