Rolex Rings IPO: GMP, date, price, other key details to know before you subscribe

Auto-components maker Rolex Rings Limited's initial public offering (IPO) will open for subscription on Wednesday i.e., July 28 and will be closed on July 30. The company has fixed its price band for the initial share sale at ₹880-900 a share. The issue comprises of a fresh issue of ₹56 crore and an offer for sale (OFS) of ₹750 crore by Rivendell PE.

As per market observers, Rolex Rings grey market premium (GMP) is at around ₹420. The grey market is an unofficial platform, wherein trading starts after the announcement of IPO price band till the listing of IPO shares.

Rolex Rings is one of the top five forging companies in India in terms of installed capacity and a manufacturer and global supplier of hot rolled forged and machined bearing rings, and automotive components.

''Glaring at the performance of company, the growth seems to be missing as revenue from operations remained at ₹6163.32 million in FY 2020-21 from ₹9043 million in FY 2019,'' said Abhay Doshi, Founder, UnlistedArena.com, dealing in Pre-IPO & Unlisted Shares.

As per RHP the company had defaulted in payment of certain loans in the past, and had approached CDR Cell for restructuring debt in FY 2013. The raw materials used by company pre-dominantly includes carbon steel, alloy steel and stainless steel, the price of which has been volatile in the past which could affect their operating margins. ''At the price of ₹900, the asking PE comes at 24x. High sentiment in primary markets may emnate in listing gains but for long term it would be worthy to watch for future performance and take any decision,'' Doshi said.

Proceeds from the fresh issue would be used towards funding long-term working capital requirements as well as general corporate purposes. Equirus Capital Private Ltd, IDBI Capital Markets & Securities Limited, JM Financial Limited have been appointed as merchant bankers for the issue. The equity shares of the company will be listed on the BSE and NSE.

''For Rolex Rings, the revenues for most listed peers and the company have declined over the past four years but the company has generated better ROEs on account of better Asset Turnover. The company has a long-standing relationship with existing clients and the with newer products, it should be able to increase the share from existing customers.. Considering potential rebound in demand from user industries, we have a positive outlook on Rolex Rings IPO,'' said Milan Desai, Lead Equity Analyst, Angel Broking.