Ratnaveer Precision Engineering IPO - Review, Valuation & GMP Today

Ratnaveer Precision Engineering Limited - Complete Overview

Established in 2002, Ratnaveer Precision Engineering Limited is a manufacturer of stainless steel products. The company produces a wide range of items, including finished sheets, washers, solar roofing hooks, pipes, and tubes.

The company operates across four manufacturing units. Two units (Unit-I and Unit-II) are situated at GIDC, Savli, Vadodara, Gujarat. Another unit (Unit-III) is located at Waghodia, Vadodara, Gujarat, while the fourth unit (Unit-IV) is based at GIDC, Vatva, Ahmedabad, Gujarat.

At Unit I of Ratnaveer Precision Engineering, they produce SS finishing sheets, SS washers, and SS solar mounting hooks. Meanwhile, Unit II focuses on manufacturing SS pipes and tubes. Unit III and Unit IV play crucial roles in the company's backward integration process. Specifically, Unit III is responsible for melting steel scrap to create steel ingots, and Unit IV handles the rolling process, converting flat ingots into SS sheets. These sheets serve as the foundational material for the production of SS washers.

The company's products find applications across various industries, including automotive, solar power, wind energy, power plants, oil & gas, pharmaceuticals, sanitary & plumbing, instrumentation, electromechanics, architecture, construction, electrical appliances, transportation, kitchen appliances, and chimney liners, among others. These products cater to both commercial and residential sectors and are marketed within India and overseas.

Ratnaveer Precision Engineering aims to broaden its range of SS washers by introducing circlips to its product line. Currently, the company offers over 2500 SKUs of SS washers, including inner ring washers, spring washers, Nord-Lock washers, retaining rings, internal tooth washers, and external tooth washers in various sizes and specifications. For this expansion, the company has secured a 99-year lease for land adjoining its Unit I, located at E-78, GIDC Industrial Estate, Savli, Dist. Vadodara, Gujarat, from GIDC.

 

What does the company do? 

Ratnaveer Precision Engineering Limited is a manufacturer of stainless steel products.

 

 

Company Products

The company produces a wide range of items, including finished sheets, washers, solar roofing hooks, pipes, and tubes.

 

IPO Overview

Ratnaveer Precision Engineering's upcoming IPO is designed as a book-built issue. The IPO is anticipated to be listed on the NSE and BSE exchanges on September 14, 2023.

The Ratnaveer Precision Engineering IPO date is from September 4 to September 6, 2023. As for the allotment, the company has reserved 50% of shares for institutional investors, 15% for non-institutional investors, and 35% for retail investors.

 

Ratnaveer Precision Engineering Limited IPO timetable (Tentative)

EVENTS	DATE
IPO Opening Date	04 September 2023
IPO Closing Date	06 September 2023
IPO Allotment Date	11 September 2023
Refund initiation	12 September 2023
IPO Listing Date	14 September 2023

 

Ratnaveer Precision Engineering Limited IPO Details

IPO Opening & Closing Date	04 September to 06 September 2023
Face Value	Rs. 10 per Share
Issue Price	Coming Soon
Lot Size	Coming Soon
Price of 1 Lot	Coming Soon
Issue Size	16,840,000 Shares (aggregating up to Rs.[.] Cr)
Offer for Sale	3,040,000 Shares of Rs.10 (aggregating up to Rs.[.] Cr)
Fresh Issue	13,800,000 Shares (aggregating up to Rs.[.] Cr)
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Link Intime India Pvt. Ltd.

 

Ratnaveer Precision Engineering Limited IPO Lot Details 

Minimum Lot Investment (Retail)	Coming Soon
Maximum Lot Investment (Retail)	Coming Soon
Minimum Lot Investment (HNI)	Coming Soon
Maximum Lot Investment (HNI)	Coming Soon

 

Ratnaveer Precision Engineering Limited IPO Reservation

Institution Share Portion	50%
Non-Institution Share Portion	15%
Retail Share Portion	35%

 

Company Financial

Amount in Crores

Period	FY 21	FY 22	FY 23
Total Assets	255.92	308.63	389.05
Total Revenue	364.05	428.47	481.14
PAT	5.46	9.48	25.04
Net Worth	56.58	65.97	106.05
Reserve & Surplus	52.32	61.71	71.16
Total Borrowings	150.76	190.73	229.99

 

Revenue from operations from the top 10 customers

(Amount in Million)

Particulars	FY 23	FY 22	FY 21
Customer 1	869.51	739.29	457.28
Customer 2	529.18	292.46	236.51
Customer 3	335.09	207.41	181.50
Customer 4	111.34	125.33	112.37
Customer 5	106.36	123.87	109.82
Customer 6	90.37	113.62	107.61
Customer 7	86.56	99.61	95.83
Customer 8	86.37	85.38	71.79
Customer 9	86.32	65.03	58.77
Customer 10	79.51	54.95	40.51
Total	2,380.61	1,906.95	1,471.99

 

Geography-wise domestic revenue from operations

Zone	FY 23	FY 22	FY 21
West	69.16%	68.36%	71.53%
North	11.63%	12.06%	13.09%
South		Negligible
East		Nil
Total	80.79%	80.42%	84.62%

 

Revenue from operations breakup

(Amount in Million)

Particular	FY 23	FY 22	FY 21
Domestic turnover	3,875.39	3,432.33	3,043.68
Export turnover	921.91	837.05	552.95
Total	4,797.30	4,269.38	3,596.63

 

Objective of the Issue

The organization aimed to utilise the funds to achieve the following objectives:

• Meeting working capital requirements.
• General corporate objectives.

 

Promoters and Management of Ratnaveer Precision Engineering Limited

Vijay Ramanlal Sanghavi is the key Promoter of the Company.

Pre-issue Promoters Holding	86.3%
Post-issue Promoters Holding	--

 

Peer Comparison

The following are the listed peers of the company in its DRHP.

Company Name	Revenue from Operations (Rs. in Mn)	Diluted EPS (Rs.)	P/E Ratio
Ratnaveer Precision Engineering Limited	4,797.48	7.26	-
M.M. Forgings Limited	13,951.10	52.02	20.26
Menon Bearings Limited	2,169.40	5.84	23.07
Venus Pipes & Tubes Limited	5,523.96	22.60	59.93

 

IPO's Valuations

The IPO valuation cannot be determined due to some unspecified data in Ratnaveer Precision Engineering's DRHP.

 

Dividend Policy

The company has not distributed any dividends in the past, and the future dividend payments depend upon the company's financial performance.

 

IPO's Strengths

• Business model emphasises synergistic backward integration.
• Steady financial track record.
• Diverse product portfolio with numerous designs.
• Established R&D infrastructure for new product advancement.
• Varied customer base.
• Experienced promoter.
• Efficient quality control procedures.

 

IPO Weaknesses

• Lack of extended agreements with suppliers for raw materials.
• The company's revenue is heavily reliant on a small number of customers.
• Engaged in a high-volume, low-margin business.
• Experienced negative cash flow.
• Operates in a fiercely competitive, fragmented industry with low entry barriers.
• Potential adverse impact on future financial performance due to underutilized production capacities.
• Pending necessary approval from relevant authorities for constructing a section of the Unit-I factory premises, measuring approximately 1,300 square meters.
• A significant portion of public shareholding is held by Promoter-associated family members.
• Ongoing legal proceedings involving the company, its promoters, and directors.
• Imperative requirement for consent under specific environmental laws to operate its units.

 

 

IPO GMP

Ratnaveer Precision Engineering Limited IPO GMP is Rs. 25.

 

Conclusion

Ratnaveer Precision Engineering operates in a highly competitive and fragmented sector. The company has experienced negative cash flow as well. However, the company is seeking expansion and continues to work towards providing quality products to its clients. It is advisable for investors to consider this IPO after a thorough analysis of all factors for optimal results.

 

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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