Rishabh Instruments IPO Review - Date, Price, GMP, Details

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. The company supply a wide range of electrical measurement and process optimization equipment, and is engaged in designing, developing and manufacturing, and sale of devices significantly under their own brand across several sectors.

OBJECTS OF THE ISSUE

• Financing the cost towards the expansion of Nashik Manufacturing Facility I.
• General corporate purposes.

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KEY MANAGERIAL PERSONNEL

Narendra Joharimal Goliya

Chairman and Managing Director of the Company. He is the founder and Promoter of the Company. He has been associated with the Company since its incorporation and accordingly has over four decades of experience in the manufacturing and electrical industry.

Dineshkumar Musalekar

Group CEO. He has been associated with Lumel since January 16, 2014. He holds a bachelor’s degree of engineering (electronics and communication) from the Karnatak University Dharwad and a master’s degree in human resources development management from Somaiya Institute of Management Studies and Research, University of Mumbai.

Nitinkumar Sudhir Deshpande

Head – Marketing, Business Development and Profit Centre Head of the Company. He has been associated with the Company since July 8, 2018. He holds a bachelor’s degree of engineering (electrical engineering) from the University of Mumbai. He was previously associated with ABB Limited, Siemens Limited and Schneider Electric India Pvt Limited.

Vishal Prabhakar Kulkarni

Chief Financial Officer of the Company.He has been associated with the Company since July 21, 2014. He holds a master’s degree in commerce from the University of Pune. He is an associate member of the Institute of Company Secretaries of India. He was previously associated with Techno Force (I) Pvt Ltd. and ThyssenKrupp Electrical Steel India Private Limited.

Ajinkya Joglekar

Company Secretary and Compliance Officer of the Company. He has been associated with the Company since August 8, 2022. He holds a bachelor’s degree in commerce from the Rashtrasant Tukadaji Maharaj Nagpur University. He is an associate member of the ICSI. He was previously associated with Galactico Corporate Services Limited.

COMPANY PROFILE

• Rishabh Instruments provides comprehensive solutions to their customers looking for cost-effective ways to measure, control, record, analyse and optimise energy and processes through their array of products.
• They also provide complete aluminium high pressure die casting solutions for customers requiring close tolerance fabrication, machining and finishing of precision components.
• Rishabh Instruments has 4 segments: (a) electrical automation devices; (b) metering, control, and protection devices; (c) portable test and measuring instruments; and (d) solar string inverters.
• The Company manufactures all the products in-house from their five manufacturing facilities – two in India, two in Poland and one in China.
• They primarily follow a business-to-business model which is purchase order based for all their segments except portable test and measuring instruments which is also sold on a merchant basis.
• The Company have an extensive network of 175 authorized distributors/stockists across 81 districts in India with direct sales conducted through eight sales and marketing offices.

COMPETITIVE STRENGTHS

• Ability to drive technology and innovation through advanced research and development. Global engineering solution provider operating in large addressable markets.
• Vertically integrated operations, backed by strong manufacturing capabilities. Diversified product portfolio & wide customer base.
• Track record of successful integration of acquired businesses or entities across geographies Well-established and recognised brand
• Committed Promoters, Board and management team.

KEY STRATEGIES

• Enhance product innovation, engineering and design competence while focussing on higher value addition .
• Expanding geographical footprint.
• Continue to pursue their strategy for inorganic growth.
• Target new customers and expand existing customer accounts . Explore opportunities to tap emerging products and services segments. Promote product localization.

KEY CONCERNS

• Failure to manage component and material purchasing and shortages in the supply of their major production inputs could adversely affect the operation.
• The Company faces risks associated with their international sales and multi-location operations in various geographies. Foreign exchange fluctuations related risk is also there.
• They export their products to various countries, on account of which they may be subject to significant import duties or restrictions.
• Most of Their customers do not commit to long term contracts.
• Dependence on their own Subsidiaries exposes them to significant operational and financial risk. Shortages in the supply of semiconductors have had, and may continue to have, a adverse effect on business.

COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2023)

As mentioned in Company's RHP, there are no comparable listed companies in India or globally that engage in a business similar to that of Rishabh Instruments Limited. Accordingly, it is not possible to provide an industry comparison in relation to this Company

FINANCIALS (RESTATED CONSOLIDATED)

OUTLOOK & VALUATION

Rishabh Instruments is a multinational company offering energy efficiency solutions. The company has a diverse product portfolio and a vertically integrated operation. The company is operating globally in a large, addressable market. Their brands ‘Rishabh’, ‘Lumel’, Sifam, and ‘Tinsley’ are well recognised in multiple countries. The financial position of the company is currently not very attractive, but it is stable.

However, multi-location operations and global sales raise concerns related to international exposure. Secondly, any kind of shortage in their production inputs, like semiconductors, could also impact their business. The IPO is coming at a P/E valuation of 34.34x. Though the company does not have any listed peers to compare, its valuation is looking high in general. We will recommend this IPO only for high-risk investors.

DISCLAIMER:

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