Storage Technologies & Automation IPO (Racks & Rollers): Review

Racks & Rollers Limited IPO - Complete Overview

Established in 2010, Storage Technologies & Automation Ltd, also known as Racks & Rollers, specializes in storage racking systems. 

The company is involved in the design, manufacturing, and installation services of metal storage racks, automated warehouses, and other storage solutions. 

It serves a diverse range of industries, including oil & gas, automotive components & aerospace, food & beverages, cold storage, pharmaceutical, textile, retail, and FMCG, among others.

The company holds ISO 9001:2015 certification and operates from an expansive infrastructure covering approximately 56,250 square feet in Singanayakanahalli, Yelahanka Hobli, Bangalore, Karnataka, with an additional storage facility spanning approximately 20,000 square feet. This infrastructure supports a streamlined manufacturing process.

Having completed over 2500 projects, the company boasts a strong global presence across 30 countries and has served more than 900 customers worldwide. 

As of October 31, 2023, the company has recorded a total revenue of Rs. 5,317.09 lakhs.

 

Racks & Rollers Limited IPO Overview

Racks & Rollers Limited IPO date is slated to be open for subscription from April 30, 2024, to May 3, 2024. This BSE SME IPO follows a Book Built Issue IPO.

Racks & Rollers Limited IPO price is fixed in the range of Rs.73 to Rs.78 per share. 

The total issue size of this IPO amounts to Rs.29.95 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, Racks & Rollers Limited has seen growth in total assets, net worth, and total revenue. The profit after tax and total borrowing has also increased.

Amount in Lakhs

Period	31 Oct 2023	31 Mar 2023	31 Mar 2022
Total Assets	6,375.77	4,004.01	3,567.70
Total Revenue	5,317.09	8,137.12	6,989.72
PAT	358.91	48.30	-20.49
Net worth	953.52	594.61	546.31
Reserve & Surplus	653.52	294.61	246.31
Total Borrowings	1,632.53	931.63	871.10

 

The Objective of the Issue

The company intend to utilize the proceeds of the Issue for the following objectives: -

1. To meet Working Capital requirements

2. General Corporate Purpose

 

Peers of Racks & Rollers Limited IPO

Name of the Company	Face Value (Rs)	EPS (Rs)	P/E Ratio
Storage Technologies and Automation Limited	10	1.61	-
Alphalogic Industries Limited	10	111.53	1.94

 

 

 

Evaluation

The IPO is priced within the range of Rs.73 to Rs.78 per share.

Evaluation of P/E Ratio

• Considering the FY23 EPS of Rs 1.61 from the last year, the resulting P/E ratio is 48.44x.

• Taking into account the weighted EPS of Rs 1.24 for the last three years, the P/E ratio amounts to 62.90x.

Comparative Analysis with Listed Peers

• The industry's average P/E is 1.94x.

As a result, the IPO price range, with a P/E ratio ranging from 48.44x to 62.90x, seems overpriced to the industry average of 1.94x.

 

IPO's Strengths 

• Seasoned promoters backed by a senior management team

• The diverse array of products

• Ongoing commitment to maintaining high-quality standards

• Strong capabilities in product development and design optimization

 

IPO Weaknesses 

• The company relies on a limited number of customers for sales.

• The company is facing several outstanding litigation cases.

• The company has experienced negative cash flows in the past.

• Significant competition in its business could be a challenge for the company.

• A list of MSME vendors has not been identified by the company.

• Certain regulatory approvals may not be obtained by the company in the ordinary course of its business.

 

 

 

IPO GMP Today

The Latest GMP of Racks & Rollers Limited IPO is Rs.49.

 

Racks & Rollers Limited IPO timetable (Tentative)

Racks & Rollers Limited IPO is scheduled from April 30 to May 3, 2024, with allotment on May 6, refund initiation on May 7, and listing on May 8, 2024.

Events	Date
IPO Opening Date	April 30, 2024
IPO Closing Date	May 3, 2024
IPO Allotment Date	May 6, 2024
Refund initiation	May 7, 2024
IPO Listing Date	May 8, 2024

 

Racks & Rollers Limited IPO Details 

Racks & Rollers Limited IPO, with a face value of Rs.10 per share, opens on April 30 and closes on May 3, 2024, offering 3,840,000 shares at Rs.73 to Rs. 78 per share, with a lot size of 1600 shares, aiming to raise Rs.29.95 Cr, and will be listed on BSE SME.

IPO Opening & Closing Date	April 30, 2024 to May 3, 2024
Face value	Rs. 10 per share
Issue Price	Rs 73 to Rs 78 per share
Lot Size	1600 Shares
Price of 1 Lot	Rs 124,800
Issue Size	3,840,000 Shares (aggregating up to Rs.29.95 Cr)
Fresh Issue	3,840,000 Shares (aggregating up to Rs.29.95 Cr)
Listing at	BSE SME
Issue Type	Book Built Issue IPO
Registrar	Integrated Registry Management Services Private Limited

 

Racks & Rollers Limited IPO Lot Details 

For Racks & Rollers Limited IPO, the retail investor minimum and maximum lot investments are both 1 lot (1600 shares) at Rs.124,800 while for HNI investors, the minimum investment is 2 lots (3200 shares) at Rs.249,600.

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

 

Racks & Rollers Limited IPO Reservation

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

 

Promoters and Management of Racks & Rollers Limited

• Mr. Khasim Sait

• Mr. Mohammad Arif Abdul Gaffar Dor

• Mr. Hanif A Khatri

• Mr. Syed Azeem

• Mr. Afzal Hussain

• Mr. Nuumaan Khasim

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

 

Racks & Rollers Limited IPO Lead Managers

• Overview Corporate Advisors Private Limited

 

Dividend Policy

The Company has not declared any dividends during the last three financial years

 

 

 

Conclusion

The company operates in a competitive market and has previously experienced negative cash flow. The sudden increase in the company’s PAT and net worth has raised eyebrows. Experienced investors may consider investing in the upcoming IPO after thoroughly evaluating all factors to maximize gains.

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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