Rolex Rings IPO: An Indirect Automobile Play

The auto ancillary industry in India has been largely centered around NCR, Tamil Nadu and Maharashtra, which is obviously due to their proximity to auto manufacturing hubs. Rolex Rings manufactures hot-rolled forged and machine bearing rings and other auto components for the auto industry. Rolex Rings supplies to automotive and industrial consumers. Apart from auto companies, Rolex Rings also counts marquee names like Timken, SRF and Schaeffler among bearing manufacturing clients.

A quick look at the financials indicates that the company has been consistently profit-making, although revenues and profits came under pressure on account of COVID. For the six month ending Sep-20, the company reported net revenues of Rs.225 crore and net profits of Rs.25.3 crore giving a net margin of 11.25%. Net margins had fallen in previous years and only in the Sep-20 half year the net margins have got back to the 2018 levels.

The Rolex Rings IPO opens on 28 July and closes on 30 July and the book built issue will be a mix of fresh issue and offer for sale. The company is raising Rs.70 crore of fresh funds and will issue 65 lakh shares as offer for sale to existing owners. The funds raised via fresh issue will be used for working capital purposes and for general corporate purposes.

Read: Important Facts of Rolex Rings

Equirus Capital, IDBI Capital markets and JM Financial are the lead manages to the issue. In terms of IPO performance of lead managers in 2021, Equirus has managed 3 issues with all 3 getting positive listing. IDBI Capital has managed 1 issue with positive listing. JM has managed 9 issues in 2021 with 7 getting positive listing.