Rajputana Industries Limited

Rajputana Industries Limited is primarily engaged in the business of manufacturing of diverse range of non-ferrous metal products from primarily Copper, Aluminium, Brass and various alloys from recycling of scrap metal. They procure scrap metal from open markets and convert them into billets made of metals like aluminium, copper or brass etc. through recycling in the in house manufacturing unit situated at SP-3, SKS Industrial Area, Reengus Extension, Sikar, Rajasthan. Once these billets are manufactured from recycled scrap metal, they either sell them to different manufacturing companies or they use them to produce products like Copper rods, Aluminium rods, Copper mother tube, brass wires, super enameled copper conductor and many more products. These wires, tubes, bars, billets and rods are manufactured in various shapes and sizes as per the requirement of the customers and / or demand in the market. With a view to enhancing the product portfolio, the Company is entering into the business of manufacturing of cables which shall be primarily used in the construction industry, mainly residential and submersible cables for motors. The proposed cable plant shall be installed in the existing manufacturing facility of the company situated Sikar by utilizing the surplus area in the manufacturing facility. The total cost of the project is around Rs. 5.88 Cr. As per financial performance, Rajputana Industries Limited has posted total income / net profits of Rs 244.50 Cr / Rs 2.63 Cr (FY22), Rs 255.24 Cr / Rs 3.09 Cr (FY23) and Rs 327.01 Cr / Rs 5.12 Cr (FY24). So as per previous financials data, company has shown good sales growth, but net-profit margin is too low. Company has posted an average EPS of Rs 2.74 and average RoNW of 15.74% for last three fiscals. Issue is priced at a P/BV of 1.79 as per NAV of 21.25 as on 31.03.24. If we attribute latest earnings of FY22, FY23 and FY24 on fully diluted equity post issue, then asking price is at a P/E of around 32, 27.26 and 16.47 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Holani Consultants Private Limited is associated with this SME IPO and handled 9 IPOs in last 3 years. From last 9 IPOs, one opened below issue price and remaining above or at par on the day of listing. As of now from last 9 IPOs, all are trading above issue price. ( As on 26.07.24 ) As per financials, Rajputana Industries Limited has shown good sales growth, RoNW is 15.74% and P/E is respectively 32, 27.26 and 16.47 as per FY22, FY23 and FY24 earnings. So, issue looks fully priced. Company is engaged in manufacturing of diverse range of non-ferrous metal products, which is highly fragmented and competitive business segment. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. One may apply for listing gains. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

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