Rashi Peripherals IPO subscribed 61% on Day 1 so far; retail, NIIs bidders active

The initial public offering (IPO) of Rashi Peripherals received a mixed response from the investors during the first day of the bidding process, across all categories of investors. The issue, which had kicked-off for bidding on Wednesday, February 07, was not heavily booked on day one.

Mumbai-based Rashi Peripherals is selling its shares in the price band of Rs 295-311 apiece with a lot size of 48 shares and its multiples thereafter. The issue is entirely a fresh sale of up to 19,292,604 equity shares. The company is looking to raise a total of Rs 310.93 crore via IPO.

According to the data, the investors made bids for 86,52,144 equity shares, or 61 per cent, compared to the 1,42,37,289 equity shares offered for the subscription by 14.55 pm on Wednesday, February 07. The bidding for the issue will continue for three days and conclude on February 9, Friday.

The allocation for retail investors was subscribed 91 per cent, while the portion reserved for non-institutional investors saw a subscription of 72 per cent. However, the quota set aside for qualified institutional bidders (QIBs) was yet to attract any bids as of the same time.

Rashi Peripherals was incorporated in 1989 and it distributes global technology brands in India. They specialize in products related to ICT or Information and communication technology. The company's service offerings include value-added services such as pre-sales, technical support, marketing services, credit solutions and warranty management services.

Brokerage firms are mostly positive on the issue citing its strong financial performance, experience management, growing business and market leadership in certain segments. However, negative cash flows, rising competitions and high dependence on imports are key negatives for the company.

The company is valued at FY23 PE and EV/EBITDA multiple of 16.6 times and 12.2 times respectively, at the upper price band on post-issue capital. The revenue from operations grew at a CAGR of 26.3 per cent from Rs 5,925.1 crore in FY21 to Rs 9,454.3 crore in FY23 and was Rs 5,468.5 crore in 1HFY24, said SBICap Securities.

The company’s total borrowings as of 1HFY24 stood at Rs 1,395 crore, debt-to-equity ratio of 1.8 times. The company is raising funds to use the part of the proceeds to reduce debt and fund working capital requirements. This will significantly reduce the debt-to-equity ratio to 0.8 times on post issue capital," it added with a 'subscribe for long-term' rating.

Ahead of its IPO, Rashi Peripherals has mopped up Rs 180 crore by allocating 57,87,780 equity shares at an issue price of 311 apiece via anchor investors. The IPO allocates 50 per cent of the offer to qualified institutional bidders (QIBs), with non-institutional investors receiving 15 per cent, and the remaining 35 per cent allocated to retail investors.

Ventura Securities has suggested to subscribe to the issue citing increased wallet share with global technology brands for existing portfolio; Government initiatives promoting digitalization and online services; PLI Scheme; Optimized logistics and distribution methods; and regulations promoting sustainability and responsible waste management.

ICICI Securities and JM Financial are the book running lead managers of the Rashi Peripherals IPO, while Link Intime India is the registrar for the issue. Shares of the company are proposed to be listed at both BSE and NSE with Wednesday, February 14 as the tentative date of listing.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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