Rajputana Stainless IPO Day 1 Updates: Issue booked 30% so far. GMP hints nearly 2% listing gains. Apply or skip?

Rajputana Stainless IPO subscription status was 30% on day 1. The retail portion is subscribed 4%, and NII portion has been booked 65%, Qualified Institutional Buyers (QIBs) portion received 99% bids.

The company has received bids for 63,04,540 shares against 2,09,00,000 shares on offer, at 17:00 IST, according to data on BSE.

GEPL Capital highlights the company’s integrated setup enables flexible production, allowing the company to convert billets into long and flat stainless-steel products or sell billets independently based on market demand. On the valuation front, based on the FY25 earnings, relative to the company's paid-up capital, the issue is priced at a P/E ratio of 21 times. The issue is fairly valued compared to its peers, healthy financial performance, planned forward integration, and reduction of debt levels. Therefore, recommend a Subscribe rating for the issue.

Adroit Financial highlights the company produces a wide array of long and flat stainless- steel products, such as billets, forging ingots, rolled black and bright bars, and wire rods, offered in over 80 diverse grades. This diversification reduces the company's dependency on any single product, effectively derisking its revenue streams across multiple industrial applications.

On the valuation front, the issue is at a P/E of 20.9 times (based on upper price band) and recommended Subscribe rating, considering growth potential and valuations.

SBI Securities highlights the company plans to foray into the manufacturing of stainless-steel seamless pipes by means of utilizing a portion of vacant land within the premises of the existing facility. This foray will mark a case of forward integration for the company along with product diversification.

The basic raw material required for manufacturing of stainless-steel seamless pipes is rolled bars, which is being presently manufactured by the company at its existing facility.

On the valuation front, at the upper price band of ₹122, the issue is valued at a P/E of 25.6x and EV/EBITDA of 12.6 times on a post‐issue basis, and given RSL’s superior profitability metrics relative to peers, the valuation appears relatively attractive. Recommend Subscribe for a long-term investment horizon.

Adroit Financial highlights the company produces a wide array of long and flat stainless- steel products, such as billets, forging ingots, rolled black and bright bars, and wire rods, offered in over 80 diverse grades. This diversification reduces the company's dependency on any single product, effectively derisking its revenue streams across multiple industrial applications.

On the valuation front, the issue is at a P/E of 20.9 times (based on upper price band) and recommended Subscribe rating, considering growth potential and valuations.

Their major customers are domestic manufacturers and traders and they carry out marketing activities primarily through engagement in sponsorship and by participating in exhibitions to increase the visibility of our business activities. Their success lies in the strength of their relationship with their customers who have been associated with our Company for a long period.

They leverage relationships with their existing customers to procure repeat orders from them. The company does not enter any long-term contract with the customers and sell their products against the purchase order received from their customers.

1. The company derives a significant portion of our revenue from operations from their top 10 customers (44.9%) and do not have long-term contracts with all these customers. If one or more such customers choose not to source their requirements or terminate contracts or purchase orders, it could impact business, cash flows, financial condition and results of operations may be adversely affected.
2. The company derives majority of sale from the domestic market and a significant portion (90%) of our domestic sales are derived from the states of Maharashtra (48%), Gujarat (35%) & Uttar Pradesh (8%). Any adverse developments in this market could adversely affect their business.
3. Their manufacturing facility and proposed facility is located in Gujarat and therefore operations are highly vulnerable to regional conditions and economic downturns in the region.
4. The company relies substantially on its top 10 suppliers (40%) of the raw materials and work-in-progress goods used in their manufacturing processes. Any shortages, delay or disruption may have a material adverse effect on their business, financial condition, results of operations and cash flows.
5. The company has contingent liabilities amounting to ₹12,082.46 Lakhs which is 68.4% of its net worth and the financial condition could be adversely affected if any of these contingent liabilities materializes.

1. Setting up of Stainless-Steel Seamless Pipe Units
2. Strengthening foothold in their existing markets and expanding customer base
3. Continue to improve operations and profitability through strategic initiatives
4. Continue efforts towards training of manpower
5. Focus on rationalizing their Indebtness

The company has established a track record of over two decades in stainless steel manufacturing, having produced and delivered more than 5.50 lakh metric tons of stainless-steel products across varied grades and specifications between FY2006 and FY2025. The company’s customer base comprises both manufacturers and traders, with a total of 370 customers in FY2025, reflecting a diversified outreach. Notably, around 167 customers have been associated with the company for over three years, contributing approximately 75.83% of FY2025 revenue, indicating strong repeat business and relationship stability.

“Rajpurana Stainless Steel, valued at ~21x P/E (post issue) on FY25 earnings (at the upper band) is valued fairly in relation to its competitors. Considering the company’s consistent track record & superior financial metrics, the valuation is fully priced in. Hence, we recommend subscribing to the IPO,” said Anand Rathi.

Rajputana Stainless IPO has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors.

As per red herring prospectus (RHP), the company's listed peers are Mangalam Worldwide Ltd (with the P/E of 22.57), Mukand Ltd (with a P/E of 26.34), Electrotherm Ltd (with a P/E of 3.16), and Panchmahal Steel Ltd (with a P/E of 182.18).

Tentatively, Rajputana Stainless IPO basis of allotment of shares will be finalised on Thursday, March 12 and the company will initiate refunds on Friday, March 13, while the shares will be credited to the demat account of allottees on the same day following refund. Rajputana Stainless share price is likely to be listed on BSE and NSE on Monday, March 16.

Gujarat-based stainless steel manufacturer Rajputana Stainless has opted to cancel its anchor book later today after successfully securing one institutional investor on March 6, just a day before the IPO opens for public subscription.

Rajputana Stainless initiated its anchor book on March 6 but attracted only one anchor investor - Shine Star Build Cap Private Limited, which purchased 8.19 lakh shares for ₹10 crore, in contrast to the intended anchor book of ₹76.49 crore. This situation does not comply with SEBI regulations.

"The minimum number of anchor investors required for allocation under the anchor investor portion, as specified under the SEBI Regulations, did not participate in the offer," the company in its filing to exchanges late night on last Friday said.

Rajputana Stainless IPO GMP today is 2. Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Rajputana Stainless shares is indicated as ₹124 apiece, which is 1.64% higher than the IPO price of ₹122.

Considering the grey market activities from the past ten sessions, today's IPO GMP is trending upwards and indicates a robust listing. The lowest GMP recorded is ₹0.00, while the highest is ₹2, as per expert opinions.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.