Royalarc Electrodes Limited is coming up with an IPO consisting of a fresh issue of up to 18,00,000 equity shares and an offer to sell up to 12,00,000 existing shares with a face value of ₹10 each. The company aims to utilise the funds from the net proceeds to fund the expansion of the manufacturing facility, financing the company’s working capital needs and general corporate purposes.

Royalarc Electrodes IPO – Important Dates

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Royalarc IPO – Company Profile

Royalarc Electrodes Ltd, incorporated in 1996, is engaged in the business of manufacturing welding electrodes, flux-cored wires, MIG/TIG wires, and strip cladding. They manufacture both standardised and customised products.

The company is also engaged in the business of trading ancillary/incidental products like abrasive wheels, welding flux, saw wire, saw flux, and special TIG /MIG, and it supplies its products to domestic and export customers.

The company produces products utilising copper-coated wire, MS strips, MS wire, SS strips, SS wire, nickel wire, and ferroalloy powder at a cutting-edge facility covering an area of 269,198 sq. ft. in Zaroli, Umbergaon, Gujarat.

Royalarc Electrodes Ltd IPO Fundamental Analysis

Royalarc Electrodes Limited’s financial analysis reveals a growing performance. Revenue has increased, with increasing profitability and EPS, along with an increase in total assets and equity and an increasing inventory turnover ratio, indicating potential operational efficiency. 

• Revenue Trend: The revenue increased from ₹9,649.02 lakhs in March 2023 to ₹9,978.75 lakhs in March 2024. 
• Equity and Liabilities: Equities have shown a consistent increase over the periods, reflecting potential growth and expansion. However, the debt-equity ratio has decreased, indicating a declining reliance on debt financing. 
• Profitability: The profit after tax (PAT) has significantly increased from ₹956.82 lakhs in March 2023 to ₹1,192.63 lakhs by March 2024. 
• Earnings per Share (EPS): The basic EPS has increased from ₹10.29 in March 2023 to ₹12.82 by March 2024, reflecting higher earnings per share for investors. 
• Return on Net Worth (RoNW): The RoNW has decreased from 31.53% to 28.21%, indicating a decrease in the company’s ability to generate returns on shareholder equity. 
• Financial Position: Total assets have increased, suggesting potential business growth. However, the current ratio has increased, indicating increased liquidity in meeting short-term obligations. 
• Inventory Turnover Ratio: There’s an increase in the Inventory Turnover Ratio, which might suggest faster sales or efficient inventory management.

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Royalarc Electrodes IPO Financial Analysis

Royalarc IPO Peer Comparison

Royalarc Limited shows a steady performance. ESAB India Limited has the highest revenue, P/E Ratio, EPS, and RONW among its peers, and  Ador Welding Limited has the highest NAV when compared to its peers. Gee Limited and Rasi Electrodes Limited have shown stable growth and consistent results.

Royalarc Electrodes Ltd IPO Objective

The main objective of Royalarc Electrodes Ltd IPO is to fund the expansion of the manufacturing facility, financing the company’s working capital needs, and general corporate purposes.

1. Funding towards the expansion of their manufacturing facility situated at Village Zaroli, Umbergaon Valsad, Gujarat, Bharat: The proposed expansion at their existing manufacturing facility in Village Zaroli, Umbergaon, Valsad, Gujarat, Bharat is estimated to have a total capital cost of ₹488.66 lakhs, which they intend to fund using the net proceeds.

2. Funding the working capital requirements of the Company: The company proposes to utilise up to ₹1,650 lakhs towards funding its working capital requirements in the ordinary course of business in the Fiscal 2025 and Fiscal 2026.

3. General corporate purposes: The Company proposes to deploy the balance proceeds towards general corporate purposes as approved by their management from time to time, subject to such utilisation not exceeding 25% of the gross proceeds, in compliance with the SEBI ICDR Regulations.

Royalarc Electrodes IPO Risks And Challenges

Royalarc Electrodes Limited’s risks include over-dependency on the domestic market, single manufacturing facility, and product diversification risks, which could adversely impact operations, profitability, and business performance.

• Their revenue heavily relies on the domestic market, which accounts for a significant portion of their total revenue from operations. Any negative changes in the conditions impacting the domestic market could have an adverse effect on their business, operational results, and financial condition.

• They operate a single manufacturing facility, so any localised social unrest, natural disasters, service disruptions, or production interruptions at or shutdowns of their facility could significantly impact their business and financial condition.

• The commercialisation and market development of new products may take longer than anticipated and could involve unexpected business risks. If they are unable to successfully diversify their product offerings, it could hinder their growth and negatively affect their profitability.

Royalarc Electrodes Ltd IPO – Industry & Market Potential

The Indian manufacturing industry generated 16-17% of India’s GDP pre-pandemic and is projected to be one of the fastest-growing sectors. With 17% of the nation’s GDP and over 27.3 million workers, the manufacturing sector plays a significant role in the Indian economy.

The Indian machine tool market size reached US$ 1.5 billion in 2023. The machine tools market is expected to reach US$ 3.2 billion by 2032, exhibiting a growth rate (CAGR) of 8.2% during 2024-32.

By 2030, the Indian government expects the electronics manufacturing sector to be worth US$ 300 billion. Initiatives, like Make in India, Digital India, and Startup India, have given much-needed push to the Electronics System Design and Manufacturing (ESDM) sector in India. 

Royalarc IPO – Type of Offer

Royalarc Electrodes Limited plans a fresh issue of up to 18,00,000 shares, with a face value of Rs. 10 per share, to fund the expansion of the manufacturing facility, financing the company’s working capital needs and general corporate purposes. Additionally, the company proposes an offer to sell up to 12,00,000 existing shares. 

1. Fresh Issue: The company will issue up to 18,00,000 new shares to raise capital, fund the expansion of the manufacturing facility, finance the company’s working capital needs, and general corporate purposes.
2. Offer for sale: Royalarc Electrodes Limited is offering to sell up to 12,00,000 existing shares with a face value of Rs. 10 per share. The following are the details of the existing shareholders, who are also the promoters selling the shares.

Royalarc Electrodes IPO Offer Size

The offer size of Royalarc Electrodes Limited consists of a fresh issue of up to 18,00,000 shares and an offer to sell up to 12,00,000 existing shares with a face value of Rs. 10 per share. The company aims to fund the expansion of the manufacturing facility, financing the company’s working capital needs, and general corporate purposes.

Royalarc IPO Allotment Structure

Royalarc Electrodes Limited’s allocation will be as follows: 50% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 35% for Retail Individual Investors (RII) according to SEBI regulations. 

● Qualified Institutional Buyers (QIB): As per SEBI regulations, 50% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers. These include entities such as banks, mutual funds, and insurance companies.

● Non-Institutional Investors (NII): 15% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs.2 lakhs.

● Retail Individual Investors (RII): The remaining 35% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs.2 lakhs. 

Read more about Royalarc Electrodes IPO Day 1 Subscription Status

How to apply for the Royalarc Electrodes IPO?

To apply for the Royalarc Electrodes IPO through Alice Blue, follow these steps:

Open a Demat and Trading Account: If you don’t have one already, you must open a Demat and trading account with Alice Blue.

1. Check for IPO Details: Once your account is active, you can check for the Royalarc Electrodes Limited IPO details in the IPO section of the Alice Blue platform.
2. Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.
3. Submit the Application: Confirm all your details and submit your application.

You can apply for the Royalarc Electrodes IPO Limited IPO at Alice Blue in just a few clicks!

Check Allotment Status: After the allotment process, you can check the allotment status to see if you have received any shares.

Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.

Read more about Royalarc Electrodes IPO Day 2 Subscription Status

How do you check Royalarc Electrodes IPO Allotment Status?

Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:

1. Log in to your Alice Blue Account: You can do this through the Alice Blue website or the trading app.
2. Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.
3. Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see the status of the IPOs you have applied for.
4. Select the Royalarc Electrodes Limited IPO: If you have applied for multiple IPOs, there might be a dropdown menu or a list where you can select the IPO you are interested in. Select the Royalarc Electrodes Limited IPO.
5. Check the Status: The status of your application should be displayed here. If the shares have been allocated to you, it would be mentioned here.

 If you face any issues, we request you reach out to our customer support team at Alice Blue for detailed assistance. 

Apart from Alice Blue, there are other ways to check the allotment status of the Royalarc Electrodes Limited IPO:

● Registrar’s Website: Visit the website of KFin Technologies Limited, the registrar of the Royalarc Electrodes Limited IPO. On the homepage, look for the ‘IPO Allotment Status’ option. You must enter your PAN, application, or Demat account number to check your allotment status. Click on the ‘Submit’ button to view your IPO allotment status. 

● BSE NSE: You can also check the allotment status on the official websites of the Bombay Stock Exchange (BSE) National Stock Exchange (NSE). You would need your application number and PAN to check the status. 

Please note that the allotment status will only be available after completing the allotment process, a few days after the IPO window closes.

Read more about Royalarc Electrodes IPO Allotment Status

Royalarc Electrodes Limited IPO Offer Registrar

The registrar for the Royalarc Electrodes Limited IPO is KFin Technologies Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.

Contact information for the registrar:

KFin Technologies Limited

Selenium Tower-B, Plot 31 & 32, Gachibowli, 

Financial District, Nanakramguda, Serilingampally,

Hyderabad – 500 032, Telangana

Telephone: +91 40 6716 2222

Email: [email protected]

Website: www.kfintech.com

Read more about Royalarc Electrodes IPO Day 3 Subscription Status

Royalarc Electrodes IPO – FAQs

Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.