Refractory Shapes Ltd IPO: Review, Valuation, Date & GMP

Refractory Shapes Limited IPO  - Complete Overview

Established in 1996, Refractory Shapes Limited specializes in manufacturing various types of bricks, castables, high alumina catalysts, and ceramic balls, including pre-cast and pre-fired blocks (PCPF), burner blocks, special-shaped refractory bricks, dense and insulating castables, and mortars. 

The company also fulfills orders for metallic anchors used to support the installation of refractory castables, requiring raw materials such as tabular alumina, low alumina bricks, and insulation bricks.

The company's tailored products find applications across diverse industries, including steel, refineries, fertilizers, petrochemicals, glass, and cement. Refractory Shapes Limited operates fully equipped manufacturing plants located in the Pimpri Industrial Area, Pune, Maharashtra, and Wankaner, Morbi district, Gujarat. These facilities span a total area of 34,788 square feet in Pune and 174,246 square feet in Gujarat.

Additionally, the company has expanded its manufacturing capabilities by acquiring an additional 4 acres of land, measuring 174,240 square feet, adjacent to its existing unit in Wankaner, Gujarat.

As of 30 september 2023, the company has generated revenue of Rs. 1,957.38 Lakhs.

 

Refractory Shapes Limited IPO Overview

Refractory Shapes Limited IPO date is slated to be open for subscription from May 6, 2024, to May 9, 2024. This NSE SME IPO follows a Book Built Issue IPO.

Refractory Shapes Limited IPO price is fixed in the range of at Rs.27 to Rs.31 per share. 

The total issue size of this IPO amounts to Rs.18.60 Cr. The company has allocated shares 35% to retail investors, 50% to institutional and 15% to non-institutional investors.

 

 

Company Financial

Compared to the financial year ending March 31, 2023, and March 31, 2022, Refractory Shapes Limited has seen growth in total assets, net worth, and total revenue. The profit after tax has decreased while the total borrowing increased.

Amount in Lakhs

Period	30 Sep 2023	31 Mar 2023	31 Mar 2022
Total Assets	5,380.12	5,003.81	3,684.82
Total Revenue	1,957.38	3,872.23	2,621.67
PAT	232.21	191.74	287.04
Net worth	1,900.85	1,668.64	1,476.90
Reserve & Surplus	1,890.85	1,658.64	1,466.90
Total Borrowings	2,192.28	2,048.63	1,570.12

 

Trading and Manufacturing activities of the company

(Amount in Lakhs)

Particulars	30 Sep 2023	31 Mar 2023	31 Mar 2022
Manufacturing	1,771.38	2,906.45	1,747.47
Trading	146.53	890.47	802.85
Total	1,917.91	3,796.92	2,550.32

 

Operation-wise Revenue Break up

(Amount in Lakhs)

Industry / Sector	30 Sep 2023	31 Mar 2023	31 Mar 2022
Steel	339.08	1,595.82	1,076.91
Refinery / Petrochemicals	227.46	444.81	240.80
Fertilizers	7.30	20.95	15.80
Others	1,344.07	1,735.34	1,216.81
Total	1,917.91	3,796.92	2,550.32

 

The Objective of the Issue

The Company proposes to utilize the Net Proceeds from the Issue towards funding the following objects:

1. Funding of Capital expenditure towards civil construction required for Expanding and setting up a new manufacturing unit at the existing location situated at Wankaner, Gujarat.

2. Funding of Capital expenditure towards purchase of Plant and Machineries for Expanding and setting up a new manufacturing unit at the existing location situated at Wankaner, Gujarat.

3. Purchase of commercial vehicle.

4. General corporate purposes.

 

 

 

Peers of Refractory Shapes Limited IPO

Name of the Company	Face Value (Rs)	EPS (Rs)	P/E Ratio
Refractory Shapes Limited	10.00	1.21	-
S P Refractories Limited	10.00	6.56	16.31
IFGL Refractories Limited	10.00	16.97	41.12

 

Evaluation

The IPO is priced within the range of Rs.27 to Rs.31 per share.

Evaluation of P/E Ratio

• Considering the FY23 EPS of Rs 1.21 from the last year, the resulting P/E ratio is 25.55x.

• Taking into account the weighted EPS of Rs 1.38 for the last three years, the P/E ratio amounts to 22.46x.

Comparative Analysis with Listed Peers

• The industry's average P/E is 28.71x.

As a result, the IPO price range, with a P/E ratio ranging from 25.55x to 22.46x, seems fully priced to the industry average of 28.71x.

 

IPO's Strengths

• Industry experience and a proven track record.

• Demonstrated excellence in sourcing raw materials.

• Recognition as an Approved Vendor by Engineer India Limited (EIL).

• A broad and robust customer base.

• Providing high-quality products and services while prioritizing safety.

 

IPO's Weaknesses 

• The company, its promoters, promoter group, directors, and group companies are involved in outstanding legal proceedings.

• Negative cash flows were recorded in previous years.

• One of the company's group companies operates in the same line of business, potentially creating conflicts of interest.

• There are no long-term agreements in place with suppliers and customers.

• The company faces competition within the domestic market.

• Stringent quality requirements are imposed on the company, and any product defects or failure to meet quality standards may result in the cancellation of current and future orders.

 

 

 

IPO GMP Today 

The Latest GMP of Refractory Shapes Limited is Rs.18.

 

Refractory Shapes Limited IPO timetable (Tentative)

Refractory Shapes Limited IPO is scheduled from May 6 to May 9, 2024, with allotment on May 10, refund initiation on May 13, and listing on May 14, 2024.

Events	Date
IPO Opening Date	May 6, 2024
IPO Closing Date	May 9, 2024
IPO Allotment Date	May 10, 2024
Refund initiation	May 13, 2024
IPO Listing Date	May 14, 2024

 

Refractory Shapes Limited IPO Details 

Refractory Shapes Limited IPO, with a face value of Rs.10 per share, opens on May 6 and closes on May 9, 2024, offering 6,000,000 shares at Rs.27 to Rs. 31 per share, with a lot size of 4000 shares, aiming to raise Rs.18.60 Cr, and will be listed on NSE SME.

IPO Opening & Closing Date	May 6, 2024 to May 9, 2024
Face Value	Rs. 10 per share
Issue Price	Rs. 27 to Rs. 31 per share
Lot Size	4000 Shares
Price of 1 lot	Rs. 124,000
Issue Size	6,000,000 Shares (aggregating up to Rs.18.60 Cr)
Fresh issue	6,000,000 Shares (aggregating up to Rs.18.60 Cr)
Listing at	NSE SME
Issue Type	Book Built Issue IPO
Registrar	Bigshare Services Pvt Ltd

 

Refractory Shapes Limited IPO Lot Details 

For Refractory Shapes Limited IPO, the retail investor minimum and maximum lot investments are both 1 lot (4000 shares) at Rs.124,000 while for HNI investors, the minimum investment is 2 lots (8000 shares) at Rs.248,000.

Minimum Lot Investment (Retail)	1 lot
Maximum Lot Investment (Retail)	1 lot
Minimum Lot Investment (HNI)	2 lot

 

Refractory Shapes Limited IPO Reservation

Institutional share Portion	50%
Non-institutional share Portion	15%
Retail share Portion	35%

 

Promoters and Management of Refractory Shapes Limited

• Mr. Dayashankar Krishna Shetty

• Ms. Pratibha Dayashankar Shetty

• Ms. Prajna Shravan Shetty

Pre-issue Promoter shareholding	100.00%
Post-issue Promoter shareholding

 

Refractory Shapes Limited IPO Lead Managers

• Shreni Shares Limited 

 

Dividend Policy

There are no dividends declared by the Company.

 

 

 

Conclusion

The company operates in a competitive market and has experienced negative cash flow in the past. Additionally, the recent surge in revenue raises suspicions. Seasoned investors may choose to participate in the upcoming IPO after carefully assessing all factors to maximize potential profits.

 

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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