The Rs 255 crore IPO comprised a fresh issue of Rs 179 crore and an offer for sale of Rs 76 crore. Proceeds from the fresh issue will primarily fund capital expenditure for a new stainless steel seamless pipe facility, repay debt, and support general corporate purposes.
Despite being a sizable offering, investor response was modest. The IPO was subscribed 1.12 times overall, with institutional investors showing stronger interest. The QIB portion was subscribed 2.51 times, and the NII segment 2.59 times. Retail participation, however, remained weak at just 0.27 times, indicating limited traction among individual investors.
Rajputana Stainless manufactures long and flat stainless steel products, catering to industries such as oil and gas, aerospace, defence, automotive, and engineering. The company operates an integrated manufacturing facility in Gujarat and offers a diversified product portfolio across more than 80 grades.
Financially, the company has reported steady profitability but faces growth challenges. Profit after tax rose to Rs 39.85 crore in FY25 from Rs 31.63 crore in FY24, though revenue has been inconsistent over the years. Margins remain modest, with EBITDA in the single-digit range.
Analysts have also flagged concerns around valuations. At the upper price band, the issue is priced at a price-to-earnings multiple of around 21x, considered relatively aggressive given the company operates in a fragmented and competitive segment.
While long-term prospects depend on successfully executing expansion plans and demand from end-user industries, the near-term outlook appears muted, with investors likely to remain cautious on post-listing performance and earnings visibility.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)