Rajesh Power IPO: Price, date, valuation & GMP

Rajesh Power IPO-Complete Overview

Rajesh Power IPO an SME IPO is a book-built issue of Rs.160.47 crore by Rajesh Power Services Limited. The company began operations from the year 1971 and provides consultancy to state and private transmission and distribution utilities and industries.

In addition to providing IT solutions the company has also invested in HKRP Innovations Limited HKRP, an energy IT company focused on the power sector. The company focuses on IoT and Cloud solutions for power grids and renewable energy in particular and has developed applications such as Smart Feeder Management System SFMS, Virtual Feeder Segregation VFS, Real-Time Monitoring System of Oil Wells RTMS, and Solar Energy Data Management SEDM to name a few.

The company provides services to the power sector in both the Renewable and Non-Renewable segments and offers the following services:

1. EHV Underground Cables and Transmission Lines.

2. EHV AIS/GIS Substations Including Civil Work.

3. HV/MV/LV Underground Cable Laying and Overhead MVCC Conductor Installation.

4. Turnkey Renovation of Complete Distribution System Including Substations RMUs Transformer Cables etc.

5. Power Supply Arrangement Projects for Solar Power Plants.

6. O & M of EHV HV MV LV Substations.

7. O & M of EHV HV MV LV Transmission and Distribution Network.

Some of the prominent clients of the company include GIFT City, Gandhinagar; Gujarat Metro Rail Corporation Ltd., Gandhinagar; IFFCO, Adani Renewables, Prestige, Reliance Industries Ltd, Torrent Power Ltd, Dholera; Jay Chemicals Ltd, Saykha; Sabar Dairy, Himmatnagar; Grindwell Norton Limited (Saint Gobain) Hindustan Coca Cola, etc.

A company profile of Rajesh Power Services Ltd. RPSL will show that the company is engaged primarily in EPC contracting and the provision of services for power transmission and distribution utilities.

This Rajesh Power IPO will start on 25 November 2024, and its ‘initial public offering’ will end on 27 November 2024.

Rajesh Power IPO Overview

The Rs.160.47 crore new SME IPO comprises a combination of a fresh issue of 27.9 lac Shares (93.47 Cr) and an offer for sale (OFS) of 20 lac shares (Rs.67 crores). 

This upcoming IPO date is from November 25 to November 27, 2024. The Rajesh Power Services Limited IPO price is Rs.320 to Rs.335 for each Share. 

The expected IPO listing date is Monday, 02 November 2024, and listing at BSE and SME.

To open a demat account and apply for the IPO, Click Here.

Company Financial

(Amount in Lac)

 

Revenue Bifurcation

The revenue bifurcation for various activities is shown below:

(Amount in lac)

 

Geography-wise Revenue Breakdown  

(Amount in lac)

 

Entities-wise Revenue Breakdown  

(Amount in lac)

 

The Objective of the Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• Capital expense.

1. Purchasing equipment for cable identification, testing, and fault location,

2. DC solar power plant installation with a 1300 KW capacity,

3. Internalization of technical proficiency in green hydrogen production and related equipment, including electrolyzers.

• Additional need for working capital,

• General corporate purposes.

 

Peers of Rajesh Power Ltd.

 

Note:-

The basic EPS of the peers is for the financial year ended on 31 March 2024.

 

Evaluation

The Rajesh Power Services pvt Ltd Share price is Rs.320 to Rs.335 for each Share.

Evaluation of P/E Ratio

Considering the FY ended 31 Mar 2024 with an EPS of Rs.17.10 from the last year, the resulting P/E ratio is 19.59x.

Considering the weighted EPS of Rs.10.41 for the last three years, the P/E ratio is 32.18x.

Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is 67.58x.

 

 

In simple words, the P/E ratio of this IPO (19.59x), compared with the industry’s average P/E of 67.58x, has an undervaluation (on a P/E ratio basis only). Hence the price of the Share seems fully priced for the investors when considered based on the average P/E ratio of the industry.

 

IPO's Strengths 

• Various avenues of earning.

• Strong pipeline of contracts.

• Staff capabilities in soliciting and governing solar power projects and also expanding into hydrogen and electrolyzer operations.

• Experienced and mature in executing contracts in their respective sectors.

• Government policies supporting the growth of investments in the power and energy Sector.

• Enormous scope in renewable energy. Hydrogen and electrolyser.

• To take benefits of different Government and benefits available for Power sector projects.

 

IPO's Weaknesses

• Significant headroom in working capital is needed for implementing turnkey ventures.

• Aggressive price offering to tender and get the tenders exuded.

• The policy of the Government might change.

• Disasters.

• Risk of economic downturn.

 

Rajesh Power IPO GMP

The IPO GMP today is Rs.50 as of 19 November 2024. With a price of Rs.335 per Share, the estimated IPO listing price is Rs.385 when writing this information.

IPO Timetable (Tentative)

The IPO opening date is from November 25 to November 27, 2024, with allotment on November 28, refund initiation on November 29, and listing on December 02, 2024.

 

 

Rajesh Power IPO Details 

The Rajesh Power Services IPO with a Face Value of Rs.10 per share offers a total issue size of 4,790,000 Shares (Rs.160.47 Cr).

IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (400 Shares) amounting to Rs.1,34,000 and in multiples thereof. In contrast, for HNI investors, the minimum Lot is 2 (800 Shares) amounting to Rs.2,68,000.

 

IPO Reservation (% of Net Issue)

 

Promoters And Management of Rajesh Power Ltd.

• Mr. Rajendra Baldevbhai Patel.

• Mr. Kurang Ramchandra Panchal.

• Mr. Kaxil Prafulbhai Patel.

• Mr. Utsav Nehal Panchal.

 

 

IPO Lead Managers

• Isk Advisors Pvt Ltd.

Dividend Policy

Conclusion

The Rajesh Power IPO provides insight into how to invest in the shares of a power sector company that has been performing well and is also well diversified. With a moderate P/E ratio relative to other competitors as well as its emphasis on cleaner energy and sophisticated technology, the offering of the shares of this IPO is encouraging. Nevertheless, aspirants and interested parties have to keep in mind certain adverse factors including working capital requirements and market risks. All in all, this is a fair proposition for investors looking for the power and energy sector.

 

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.

DISCLAIMER: The content is purely for educational and information purposes only. We do NOT encourage/advise/suggest our active readers to be involved in any kind of buying or selling securities activities. Always consult your eligible financial advisor for investment-related decisions. The author does NOT through this blog intend to involve readers in trading.  

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