Deem Roll Tech LTD IPO: Review, Valuation, Date & GMP

Deem Roll Tech IPO - Complete Overview

Started in May 2003, Deem Roll Tech Limited makes strong metal rolls and follows strict rules when making them. They have important certifications like ISO 9001:2015 and a code for importing and exporting goods. Their rolls go to many countries, including the United States, Germany, and Saudi Arabia. The company has three places where they make rolls: one in Mehsana, Gujarat, one in Dadpur, Hooghly, West Bengal, and one in Ahmedabad, Gujarat. 

These units encompass various departments, including engineering and design, mould making, melting, casting, machining, and shipment, all supported by quality testing and assurance equipment. 

As of March 31, 2023, the company offers a diverse product line comprising more than seven types of rolls. Over the fiscal years 2021, 2022, and 2023, the company's revenue from operations amounted to Rs. 6,379.49 Lakhs, Rs. 9,170.45 Lakhs, Rs.10,337.12 Lakhs, and Rs. 5,007.78 Lakhs, respectively, reflecting a compound annual growth rate (CAGR) of 27.30%. As of December 31, 2023, Deem Roll Tech Limited employed 275 individuals.

 

Their products can majorly be divided as:

(Spheroidal Graphite Iron Rolls)	(Adamite Rolls)
(Double Pour Indefinite Chilled Rolls)	(Indefinite Chilled Rolls)

 

Deem Roll Tech IPO Overview

Deem Roll Tech IPO date is slated to be open for subscription from February 20, 2024, to February 22, 2024. This NSE SME IPO follows a Fixed Price Issue IPO.

Deem Roll Tech IPO price is fixed at Rs. 129 per share. 

The total issue size of this IPO amounts to Rs.29.26 CR. The company has reserved 50% for retail investors and 50% for other investors. 

 

 

Deem Roll Tech IPO timetable (Tentative)

Events	Date
IPO Opening Date	20 February 2024
IPO Closing Date	22 February 2024
IPO Allotment Date	23 February 2024
Refund initiation	26 February 2024
IPO Listing Date	27 February 2024

 

Deem Roll Tech IPO Details

IPO Opening & Closing Date	20 February to 22 February 2024
Face Value	Rs.10 per share
Issue Price	Rs.129  per share
Lot Size	1000 Shares
Price of 1 lot	Rs.129,000
Total Issue Size	2,268,000 shares (aggregating up to Rs.29.26 Cr)
Fresh issue	2,268,000 shares (aggregating up to Rs.29.26 Cr)
Listing at	NSE SME
Issue Type	Fixed Price Issue IPO
Registrar	Bigshare Services Pvt Ltd

 

Deem Roll Tech IPO Lot Details

Application	Lot	Shares	Amount
Minimum Lot Investment (Retail)	1 lot	1,000	Rs.129,000
Maximum Lot Investment (Retail)	1 lot	1,000	Rs.129,000
Minimum Lot Investment (HNI)	2 lot	2,000	Rs.258,000

 

Deem Roll Tech IPO Reservation

Retail Shares Offered	50%
Other Shares Offered	50%

 

Company Financial

In FY 23, Deem Roll Tech Limited experienced growth in financials compared to FY 22.

(Amount in Lakhs)

Period	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Total Assets	9,825.85	9,251.44	8,263.02
Total Revenue	5,027.55	10,448.57	9,212.12
PAT	371.83	692.05	409.78
Net worth	3,780.02	3,408.19	2,716.16
Reserve & Surplus	4,245.86	4,319.43	3,627.38
Total Borrowings	2,062.47	2,080.88	1,636.65

 

Revenue Distribution Product-Wise:

Revenue distribution for Deem Roll Tech Limited in FY 23 indicates an increase in the share compared to FY 22.

(in % age)

Particulars	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Spheodial Graphite Iron Rolls	81.48%	76.65%	73.37%
Adamite Rolls	13.59%	17.16%	21.19%
Indefinite Chilled Rolls	1.54%	3.00%	2.17%
Others	3.39%	3.18%	2.43%
Total	100.00%	100.00%	100.00%

 

Revenue Distribution Geographical-Wise:

In FY 23, Deem Roll Tech Limited saw a slight decrease in domestic revenue share, while the export revenue share increased compared to FY 22.

(in % age)

Particulars	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Domestic	82.81	80.00%	83.09%
Export	17.19%	20.00%	16.91%
Total	100.00%	100.00%	100.00%

 

Revenue by Operations:

 In FY 23, Deem Roll Tech Limited experienced a significant increase in revenue from operations compared to FY 22.

(Amount in Lakhs)

Particulars	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Revenue from operations	5,007.78	10337.13	9,170.45
Other Operating Income	19.77	111.44	41.66
Total Revenue from operations	5,027.55	10448.56	9,212.12

 

The Objective of the Issue

The company intends to use the net proceeds for the following objectives.

• Funding capital expenditure for expanding existing manufacturing facility at Mehsana, Gujarat, India.

• Financing working capital requirements.

• General corporate purposes.

 

Promoters and Management of Deem Roll Tech IPO

1. Jyoti Prasad Bhattacharya. 

2. Dev Jyotiprasad Bhattacharya.

Pre-issue Promoter Shareholding	92.18%
Post-issue Promoter Shareholding	67.12%

 

Deem Roll Tech IPO Lead Managers

•  Fedex Securities Pvt Ltd

 

 

Peers of Deem Roll Tech IPO

Deem Roll Tech Limited has positive earnings and price-to-earnings ratio (P/E) when we compare it from  Tayo Rolls Ltd.

Name of the Company	Face value (Rs. per Share)	P/ E	EPS (Basic) (Rs.)
Deem Roll Tech Limited	10	11.31	11.86
Tayo Rolls Ltd.	10	-28.43	-3.36

 

Evaluation

The IPO is priced within the range of Rs. 129 per share.

Evaluation of P/E Ratio:

- Considering the FY23 EPS of Rs 11.86 from the last year, the resulting P/E ratio is 11.31x.

- Taking into account the weighted EPS of Rs 9.12 for the last three years, the P/E ratio amounts to 14.15x.

Comparative Analysis with Industry P/E:

- The industry's average P/E is 31.3x.

As a result, the IPO price range, with a P/E ratio ranging from 11.31x to 14.15x, seems undervalued in comparison to the industry average of 31.3.

 

Dividend Policy

The company hasn't paid dividends in past fiscal years. Whether we can pay them in the future depends on factors like profits, past dividend trends, capital needs, legal restrictions, and other relevant considerations evaluated by our Board.

 

IPO's Strengths

• Diversified customer base in India and international markets, offering both standard and custom products.

• Wide range of rolls manufactured for iron and steel rolling mills, catering to long products, flat products, and seamless tubes.

• The company follows strict manufacturing rules and holds certifications like ISO 9001:2015 and an Importer-Exporter Code.

 

IPO's Weaknesses

• Heavy reliance on a few customers, posing a risk to revenue if any are lost.

• Ongoing legal proceedings involving the company, directors, and promoters at various adjudication levels.

 

 

IPO GMP Today

The latest GMP of Deem Roll Tech IPO is Rs. 78.

 

Conclusion

Deem Roll Tech Limited presents an investment opportunity through its IPO. With a strong track record of manufacturing high-quality metal rolls and a diversified product portfolio, the company has presented impressive growth over the years. 

While the IPO price is attractively set within a reasonable range, the company's valuation appears to be favourable when compared to industry averages. The absence of a dividend policy and certain weaknesses, such as customer concentration and legal proceedings, warrant careful consideration. 

Investors keen on participating in the IPO should conduct thorough due diligence, weighing the strengths and weaknesses of the offering against their investment objectives and risk appetite. Overall, Deem Roll Tech Limited's IPO presents an opportunity for investors to gain exposure to a promising player in the metal rolls industry with the potential for long-term growth.

 

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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