Everything you need to know about Rishabh Instruments Limited IPO

About the company:

Incorporated in 1982, Rishabh Instruments Limited is a global energy efficiency solution company engaged in the business of providing electrical measurement and process optimization equipment and engaged in the designing, development, and manufacturing of devices primarily across power and industrial sectors.

The company manufactures all its products in-house from its five manufacturing facilities–two in India, two in Poland, and one in China and has a global footprint and exposure in over 100 countries, and nearly 67-75% of total revenue from operations comes from overseas operations.

The company is 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.

About the industry:

The global electrical automation market was valued at USD 139.1 billion in 2021 and is expected to grow at a CAGR of 7.9% to reach USD 203.6 billion by 2026. Asia-Pacific is the fastest growing region and is expected to become the largest by 2026. The market push is expected to come from new building automation facilities, greenfield factories, and digitization initiatives in brownfield factories.

  • The Indian Electrical Automation market was valued at USD 5975.6 million in 2021 and is forecasted to grow at a CAGR of 8.6% to reach USD 9024.6 million by 2026. The market experienced a slowdown in 2020 due to the COVID-19 pandemic, but it has bounced back strongly and showcases a strong and positive outlook.

Globally, the electrical automation component market has been dominated by international players like Siemens,ABB, Emerson, and others. The top 5 players occupy 27.5% of the global market share followed by a long tail of regional and small players.

  • In India, the market is dominated by international players. The top 5 companies occupy approximately 50% market share. Local players compete with global brands on price points and customer service and are emerging competition. Industrial end users prefer a single vendor for all their needs, so international players have an advantage because of their wide product portfolio in this segment. Local players form a major part of others (48.8%) and in large part supply SMEs that make up the country’s manufacturing base in India. Rishabh Instruments is the number one player in electrical transducers in India and holds approximately 37% of market share and with respect to TAM, it holds 0.07 % market share in the electrical automation segment.

Metering, Control and Protection Devices: The global Metering, Control and Protection Devices market is estimated at USD 33 billion in 2021 and is expected to witness a 4.8% CAGR to reach USD 41.7 billion by 2026. Resumption of infrastructure development is expected to push adoption from commercial and utility applications across the globe. The components are used in applications such as electrical distribution, industrial panels and process control, and their end users include residential buildings, commercial buildings, industrial buildings and other industries such as Railways, Defense, Steel & Cement, Oil & Gas and Utilities.

Global Metering, Control and Protection Devices Market: The Global Metering, Control and Protection Devices market was estimated at USD 33 billion in 2021 and is expected to witness a 4.8% CAGR to reach USD 41.7 billion by 2026.

Indian Metering, Control and Protection Devices Market: The Indian Metering, Control and Protection Devices market was valued at USD 637.7 million in 2021 and is forecasted to grow at a CAGR of 5.3% to reach USD 826.5 million by 2026. Expansion of power generation and distribution facilities and construction of new factories would contribute to major revenues in the future.

Objects of the issue and proceeds utilization

The Rs. 490.78 crore public offer of Rishabh Instruments Ltd. comprises fresh equity issue worth 75 crores and OFS worth 415.78 crores.

Purpose Proceeds (₹ crores)
Financing the cost towards the expansion of Nashik Manufacturing Facility I 59.49
General corporate purposes Balance

Financial information and other valuation metrics

Financial Year Total Assets (₹ crores) Total Revenue (₹ crores) Profit After Tax (₹ crores) EPS EBITDA (₹ crores)
March 31, 2021 511.97 356.72 35.94 9.32 70.02
March 31, 2022 563.9 420.69 49.65 12.91 82.63
September 30, 2022 566.27 264.88 16.83 4.25 35.8

Risk factors to consider:

Long term client pipeline uncertainty: Most of the customers do not commit to long term contracts, and may cancel their orders and that may lead to change in production quantities, delay production or change their sourcing strategy.

Risks associated with manufacturing: Under-utilization of manufacturing capacities and an inability to effectively utilize expanded manufacturing capacities could have an adverse effect on the business, future prospects and future financial performance.In case of oversupply in the industry or lack of demand , Company may not utilize our expanded capacity efficiently. It’s aggregate capacity utilization was 42.99%, 45.33%, 46.19% and 55.07% in the six months ended September 30, 2022 and Fiscals 2022, 2021 and 2020.

Higher capital requirements: Company has significant capital requirements as the business model is capital intensive as it constantly seeks to add new and upgrade their existing manufacturing facilities; increase our product portfolio; and invest in the research and development of new technologies and products, among others… If they experience insufficient cash flows which may require making payments on their debt or fund working capital requirements, there may be an adverse effect on the business and results of operations.

IPO Schedule

Issue Period 30th August to 1st September 2023
Price band ₹ 418 - 441
Minimum Bid quantity 34 & Multiples thereof
Deadline for accepting UPI mandate Until 5 PM on the issue closing day
Finalization of Allotment 6th September 2023
Initiation of Refunds 7th September 2023
Credit of Shares 8th September 2023
Date of Listing 11th September 2023
Mandate end date 16th September 2023
Anchor Investors Lock-In End Date 1st October 2023

How to apply to the Rishabh Instruments Limited IPO?

You can apply for the Rishabh Instruments Limited IPO using any supported UPI app by following two steps:

  • Enter your bid on Kite
  • Accept the UPI mandate on your phone

On acceptance of the mandate, the bid amount will get blocked in your bank account. Click here to learn more.

How to check the allotment status for Rishabh Instruments Limited IPO?

You can check the allotment status for the Rishabh Instruments Limited IPO on the website of the Registrar and Transfer agent. Alternatively, you can also check the allotment status on the NSE website.