Rolex Rings Share Price: Automaker Makes a Strong Debut, Listing at a 39% Premium to Issue Price

Rolex Rings, a manufacturer of automotive components, had its stock market debut on Monday, with shares trading at 1,250 per share on the NSE, a nearly 39 percent premium to its issue price of 900 per share. The stock was trading at 1,252 per share on the BSE.

Rolex Rings initial public offer (IPO), that had opened for subscription on July 28 and closed on July 30, was subscribed 130.44 times on its final day of the bidding. The company’s price band was fixed at ₹880-900 per share.

The offer had comprised a fresh issue of Rs 56 crore and an offer for sale of Rs 675 crore by Rivendell PE LLC. The company will utilize the net proceeds from fresh issue for working capital requirements.

74,16,00,096 shares were bid for in the 731-crore IPO, compared to 56,85,556 shares on offer. Qualified institutional buyers (QIBs) received 143.58 subscriptions, non-institutional investors 360.11 subscriptions, and retail individual investors (RIIs) 24.49 subscriptions, respectively. Prior to the IPO, it had raised roughly Rs 219 crore from anchor investors.

Rolex Rings, based in Gujarat, is a manufacturer and global supplier of hot rolled forged and machined bearing rings, as well as automotive components. It is one of India’s top five forging firms in terms of installed capacity. It serves approximately 60 customers in 17 countries, with the majority of its customers being in India, the United States, Thailand, and Europe.

About Rolex Rings

Rolex Rings is one of the top five forging companies in India, designing, manufacturing and supplying hot rolled forged and machined bearing rings, and automotive components for vehicles including two-wheelers, passenger vehicles, commercial vehicles, off-highway vehicles, electric vehicles, industrial machinery, wind turbines and railways.

Rolex supplies its products to leading bearing manufacturers such as SRF India, Schaeffler India and Timken India which account to 81 percent of the market share of Indian bearings industry.

For the Rolex Rings IPO, the majority of brokerage houses suggested a subscribe rating. “At the upper band of the IPO price of Rs 900, it is valued at a P/E multiple of 35 (on recalculated EPS omitting the Rs 25 crore deferred tax credit),” according to KRChoksey Research, which is lower than the industry average of 83.

In light of the company’s long-standing partnerships and diversified product offering, the brokerage suggested a “subscribe” for listing gains due to the company’s weak financials, concentrated client base, and under-utilized capacity.

Nirmal Bang also recommended subscribing to the issue, from a long term perspective.

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