Rishabh Instruments Limited is a global energy efficiency solution company focused on electrical automation, metering and measurement, precision engineered products, et al. with diverse applications across industries including power, automotive and industrial sectors. They supply a wide range of electrical measurement and process optimization equipment, and are engaged in designing, developing and manufacturing, and sale of devices significantly under their own brand across several sectors. The Company is a global leader in manufacturing and supply of analog panel meters, and they are among the leading global companies in terms of manufacturing and supply of low voltage current transformers. Lumel, Subsidiary, is the most popular brand in Poland for meters, controllers, and recorders and Lumel Alucast is one of the leading non-ferrous pressure casting players in Europe. They are a vertically integrated player involved in designing, developing, manufacturing and supplying (a) electrical automation devices; (b) metering, control and protection devices; (c) portable test and measuring instruments; and (d) solar string inverters. In addition, they manufacture and supply aluminium high pressure die casting through the Subsidiary, Lumel Alucast. They also provide certain manufacturing services which include mould design and manufacturing, EMI/EMC testing services, Electronic Manufacturing Services, and software solutions. Company's product portfolio consists of over 145 product lines and 0.13 million stock keeping units as of May 31, 2023. In Fiscals 2023, 2022 and 2021, they manufactured an aggregate of 16.21 million units, 14.02 million units and 13.35 million units of products, respectively, across the product lines. Over the last three financial years, i.e. Fiscals 2023, 2022 and 2021, they have served customers in over 100 countries. They are diversified in terms of end users of the products, serving industrial (FMCG, pharmaceutical, cement, steel, railways), power (generation, transmission and distribution, renewable energy, oil and gas), OEM industries (transformer, motor, cable and special machine manufacturers) and new applications (data centre, laboratories, semiconductors, consumer electronics, and building automation). Company's R&D centres are in India, Poland and China are staffed with a team of 95 engineers as of May 31, 2023. They manufacture all the products in-house from the five manufacturing facilities – two in India, two in Poland and one in China. Products manufactured at all the Manufacturing Facilities (other than Poland Manufacturing Facility II) are tested and certified by testing laboratories for certifications such as CE, ROHS, UKCA etc. In India, both the manufacturing facilities are situated in Nashik, Maharashtra. Both the Nashik Manufacturing Facilities hold ISO 9001:2015 certification of quality management system. In Poland as well, they have two manufacturing facilities both situated at Zielona Góra, Poland. Poland Manufacturing Facility I is a dedicated facility for production of electrical and electronics products. Poland Manufacturing Facility II has an aluminium die casting facility comprising a foundry, CNC machining, post processing facility (shot blasting, powder coating, painting, washing lines), tool shop and a laboratory. Both the Poland Manufacturing Facilities hold various accreditations including ISO 9001:2015, ISO 14001:2015 and IATF 16949:2016. The China Manufacturing Facility located in Shanghai, China houses a production facility and an R&D unit and holds ISO 9001:2015 certification of quality management system. The subsidiary, ESL, focuses on developing software solutions such as MARC, and their capabilities allow them to integrate software capabilities in the products. Company primarily follows a business-to-business model which is purchase order based for all the segments except portable test and measuring instruments which is also sold on a merchant basis. They have an extensive network of 175 authorized distributors/stockists across 81 districts in India with direct sales conducted through eight sales and marketing offices which collectively house 53 engineers and 24 sales personnel. The eight locations of the sales and marketing offices across India are New Delhi, Delhi, Kolkata, West Bengal, Mumbai, Maharashtra, Ahmedabad, Gujarat, Pune, Maharashtra, Chennai, Tamil Nadu, Bangalore, Karnataka and Hyderabad, Telangana. Apart from sales and marketing offices, they also have resident sales engineers in 10 cities across India. Globally they have served customers in over 100 countries in the last three financial years, i.e. Fiscals 2023, 2022 and 2021 through five sales and marketing offices and a strong global network of 339 authorized distributors/stockists as of May 31, 2023. Globally (outside India) the Company has over 164 authorized distributors/stockists catering to international customers across 70 countries including Germany, the United States ,the United Kingdom, Australia, the Middle East, etc. Lumel has 15 authorized distributors/stockists in Poland and over 20 authorized distributors/stockists outside Poland. Lumel also has resident sales engineers situated at the UAE, Hungary, Taiwan, Spain, Germany and Cyprus. In Fiscals 2023, 2022 and 2021, the revenue generated from the Indian operations accounted for 34.26%, 32.14% and 32.25%, respectively, of the total revenue from operations and remaining revenue was from the overseas operations respectively. As per financial performance, Rishabh Instruments Limited has posted total income / net profits of Rs 402.49 Cr / Rs 35.94 Cr (FY21), Rs 479.91 Cr / Rs 49.65 (FY22) and Rs 579.78 Cr / Rs 49.68 Cr (FY23). So as per previous financials data, company has shown good growth. Company has an average EPS of Rs 12.23 and average RoNW of 12.38% for last three fiscals. Issue is priced at P/BV of 4.01 as per NAV of 109.98 as on 31.03.23. If we attribute latest earnings of FY22 on fully diluted equity post issue, then asking price is at a P/E of around 33.72, and as per FY23 earnings, asking price is at a P/E of around 33.69, which looks fully priced. As per RHP, there are no listed peers. On BRLM's front, three lead managers are associated with this IPO, and have handled around 28 IPOs in last three fiscals. Dam Capital Advisors Limited : This is 14th IPO from this BRLM. From last 10 IPOs, 4 opened below issue price and remaining above or at par on the day of listing. As of now, from last 10 IPOs, one is trading below issue price and remaining are trading above issue price or at par. (As on 26.08.2023) Mirae Asset Capital Markets (India) Private Limited : This is 6th IPO from this BRLM. From last 5 IPOs, all listed above issue price or at par on the day of listing. As of now, from last 5 IPOs, two are trading below issue price and remaining are trading above issue price or at par. (As on 26.08.2023) Motilal Oswal Investment Advisors Limited : This is 9th IPO from this BRLM. From last 8 IPOs, one opened below issue price and remaining above or at par on the day of listing. As of now, from last 8 IPOs, one is trading below issue price and remaining are trading above issue price or at par. (As on 26.08.2023) As per financials, Rishabh Instruments Limited has shown good growth, RoNW is 11.67% and P/E is respectively 33.72 and 33.69 as per FY22 and FY23 earnings, which looks fully priced. Company is in business of energy efficiency solutions and precision engineering products. Performance of BRLM is good. So we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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