Royal Arc Electrodes
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 14 Feb 2025 – 18 Feb 2025
- Listing date
- 24 Feb 2025
- Face value
- ₹10 per share
- Issue price
- ₹120 per share
- Lot size
- 1,200 shares
- Listing at
- NSE
- Total issue size
- ₹36 Cr
- Market cap at offer price
- ₹133 Cr
- Promoter holding
- 99.99% → 72.96% pre-issue → post-issue
- ISIN
- INE0EO401019
- Registrar
- Kfin Technologies Ltd.
- Lead managers
- Fedex Securities Pvt.Ltd.
- Registered office
- 72 B, Bombay Talkies Compound, S.V.Road, Malad (West), Maharashtra
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Anchor investor · within QIB | 8,40,000 | — | — |
| Market maker | 1,53,600 | — | — |
Application size
Minimum 1,200 shares per lot, in multiples, at ₹120
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 1,200 | ₹1,44,000 |
| S-HNI (min) | 2 | 2,400 | ₹2,88,000 |
| S-HNI (max) | 6 | 7,200 | ₹8,64,000 |
| B-HNI (min) | 7 | 8,400 | ₹10,08,000 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Anchor investors
Institutional allocation placed a day before the issue opens, carved out of the QIB portion and locked in after listing.
Valuation and performance
Valuation at offer price
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 12.82 | 5.72 |
| P/E (×) | 9.36 | 20.98 |
| Price to book (×) | 2.64 | — |
| Market cap | — | ₹133 Cr |
Key performance indicators
- Return on net worth
- 28.21%
- ROCE
- 37.73%
- PAT margin
- 11.95%
- NAV per share
- ₹45.45
- Price to book
- 2.64
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Royal Arc Electrodes
Royal Arc Electrodes Limited was incorporated in 1996 and is engaged in the business of manufacturing welding electrodes, flux cored wires, MIG/TIG wires, and trading of ancillary/incidental products like abrasive wheels, welding flux, saw wire, and special TIG/MIG wires. The company manufactures both standardized and customized products and supplies to domestic and export customers. The company's products find applications in industries including railways, roadways, airport infrastructure, refineries, shipyards, mines, sugar industries, telecom industries, thermal power stations, and pre-engineered building sectors. As of September 30, 2024, the company operates from a single manufacturing facility at Village Zaroli, Umbergaum, Valsad, Gujarat.
Company Analysis
from RHPRoyal Arc Electrodes Limited manufactures welding consumables including electrodes, flux cored wires, and MIG/TIG wires for industrial applications, and trades ancillary products, serving domestic and export markets.
Royal Arc Electrodes Limited was incorporated in 1996 and is engaged in the business of manufacturing welding electrodes, flux cored wires, MIG/TIG wires, and trading of ancillary/incidental products like abrasive wheels, welding flux, saw wire, and special TIG/MIG wires. The company manufactures both standardized and customized products and supplies to domestic and export customers. The company's products find applications in industries including railways, roadways, airport infrastructure, refineries, shipyards, mines, sugar industries, telecom industries, thermal power stations, and pre-engineered building sectors. As of September 30, 2024, the company operates from a single manufacturing facility at Village Zaroli, Umbergaum, Valsad, Gujarat.
Objects of the Issue
- Funding towards the expansion of the existing manufacturing facility situated at Village Zaroli, Umbergaon Valsad, Gujarat, Bharat ₹488.66 Lakhs p.104
- To meet the working capital requirements ₹1,400.00 Lakhs p.104
- General Corporate Purposes [●] Lakhs p.104
Issue Structure
- Total Issue
- Up to 30,00,000 Equity Shares of face value of ₹10 each for cash at price of ₹[●] per Equity Share, aggregating up to ₹[●] Lakhs
- Fresh Issue
- Up to 18,00,000 Equity Shares of face value of ₹10 each for cash at price of ₹[●] per Equity Share, aggregating up to ₹[●] Lakhs
- Offer for Sale
- Up to 12,00,000 Equity Shares of face value of ₹10 each aggregating up to ₹[●] Lakhs by Selling Shareholders
- Price Band
- ₹[●] to ₹[●] per Equity Share (Floor Price to Cap Price)
- Lot Size
- [●] Equity Shares and in multiples thereof
- Face Value
- ₹10 each
Business Model
The company earns revenue through manufacturing and selling of welding consumables and related products. Raw materials including copper coated wire, MS strips, MS wire, SS strip, SS wire, nickel wire, and ferro alloy powder are procured on a purchase order basis. The company provides credit terms to customers ranging from 30-90 days domestically and 30-120 days for exports. The company imports certain raw materials from countries such as China, Australia, and Sri Lanka.
Business Segments
SWOT Analysis
- • Established market presence and brand recognition in welding consumables(p.25)
- • Diverse customer base across industries with long-standing relationships(p.38)
- • Quality certifications and regulatory approvals(p.38)
- • Experienced promoters with long tenure in the business(p.25)
- • Significant revenue growth over the past three fiscal years(p.38)
- • Consistent profitability improvement(p.38)
- • Dependence on single manufacturing facility(p.33)
- • High customer concentration risk(p.37)
- • High supplier concentration(p.36)
- • No long-term supply contracts with vendors(p.37)
- • Significant outstanding litigation and contingent liabilities(p.27)
- • Promoter personal guarantees on debt facilities(p.41)
- • Low capacity utilization rates(p.40)
- • Expansion of manufacturing capacity at existing facility(p.105)
- • Growth in Indian manufacturing sector(p.25)
- • Geographic expansion through distribution network(p.39)
- • New product development and diversification(p.38)
- • Cost optimization through renewable energy(p.106)
- • Access to capital markets through listing(p.103)
- • High volatility and price fluctuations in raw material costs(p.21)
- • Economic downturn and reduced customer demand(p.61)
- • Intense competition from organized and unorganized players(p.48)
- • Disruptions in supply of raw materials(p.34)
- • Regulatory changes and compliance risks(p.45)
- • Foreign exchange rate fluctuations affecting exports(p.52)
- • Restrictions on imports of raw materials from neighboring countries(p.48)
- • Labor unrest and workforce disruptions(p.33)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Bipin Sanghvi | Promoter and Managing Director | 9.60% | 6.50% |
| Tarulata Sanghvi | Promoter | 18.96% | 14.78% |
| Hardik Sanghvi | Promoter and Whole-time Director | 28.85% | 21.17% |
| Swagat Sanghvi | Promoter and Whole-time Director | 28.85% | 21.17% |
| Ami Sanghvi | Promoter Group | 6.87% | 4.67% |
| Pooja Sanghvi | Promoter Group | 6.87% | 4.67% |
Leadership
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.