Ratnaveer Precision Engineering IPO lists at 25.71% premium, closes up

Ratnaveer Precision Engineering Ltd had a relatively strong listing on 11th September 2023, listing at a premium of 25.71%, but then adding to its strength and closing at the 5% upper circuit on 11th September 2023. While the closing price on 11th September 2023 was above the IPO price, it was also well above the listing price for the day. This was broadly expected as the stock markets were at peak buoyancy during the day with the Nifty crossing the 20,000 mark during the day and the Sensex closing well above 67,100 on Monday. For the day, the Nifty closed 176 points higher while the Sensex closed a full 528 points higher. Both the Nifty and the Sensex were in the midst of a relentless bull rally, and that also helped the listing of Ratnaveer Precision Engineering Ltd on 11th September 2023, the listing day.

In fact, the subscription status was quite strong for the stock. The stock had seen strong subscription in the IPO. The subscription was 93.99X  overall and QIB subscription at 133.05X. Hence the listing was expected to be extremely strong. However, while the listing was moderate to strong, the performance was much stronger post listing. However, it must be said that the sharp rally in the market during the day hardly helped the stock hold up higher after a strong listing. Here is the Ratnaveer Precision Engineering Ltd listing story on 11th September 2023.

IPO subscription and pricing details

Ratnaveer Precision Engineering IPO was fixed at the upper end of the band at ₹98 per share which was anyways along expected lines considering the relatively strong 93.99X overall subscription and the 133.05X QIB subscription in the IPO. In addition, the retail portion had got subscribed 54X in the IPO while the HNI / NII portion also got a healthy subscription of 135.21X. The price band for the IPO was ₹93 to ₹98. On 11th September 2023, the stock of Ratnaveer Precision Engineering Ltd listed on the NSE at a price of ₹123.20, a very smart premium of 25.71% over the IPO issue price of ₹98. On the BSE also, the stock listed at ₹128, a premium of a much heftier 30.61% over the IPO issue price of ₹98 per share.

How the stock of Ratnaveer Precision Engineering Ltd closed on both exchanges

On the NSE, Ratnaveer Precision Engineering Ltd closed on 11th September 2023 at a price of ₹129.35. That is exactly at the 5% upper circuit, the maximum circuit filter for the stock on the first day. That is a first day closing premium of 31.99% on the issue price of ₹98 and also a premium of 5% on the listing price of ₹123.20. In fact, the listing price turned out to be very close to the low price of the day while the stock closed the day exactly at the high price of the day, which represented the 5% upper circuit. On the BSE, the stock closed at ₹134.40. That represents a first day closing premium of 37.14% above the IPO issue price as well as a premium of 5% on the listing price on the BSE. On both the exchanges, the stock listed strongly above the IPO issue price and then hit the 5% upper circuit in the second half of trading. The price moves were relatively less volatile during the day with the contours of the stock price range broadly defined on the day of listing. Clearly, the strong performance of the markets had a kind of spill-off effect on the stock on 11th September 2023 and allowed the stock to close the day well below the listing price for the day.

Price volume story on the NSE

The table below captures the opening price discovery in the pre-open period on the NSE.

Data Source: NSE

Let us look at how the stock traversed on the National Stock Exchange (NSE) on 11th September 2023. On Day-1 of listing, Ratnaveer Precision Engineering Ltd touched a high of ₹129.35 on the NSE and a low of ₹123. The premium to the listing price sustained for better part of the day barring the brief period when the stock slightly dipped below the IPO listing price. Mainboard IPOs normally do not have any upper circuit of 5%, unlike SME IPOs, but in the case of Ratnaveer Precision Engineering Ltd, the exchange had imposed a 5% filter circuit on the stock. If you look at the range of prices, the opening price was just marginally above the low price of the day while the stock closed day exactly at the high price of the day. The strong post-listing performance of the IPO stock was supported by robust markets with the Nifty gaining sharply during the day. On Day-1 of listing, the Ratnaveer Precision Engineering Ltd stock traded a total of 46.74 lakh shares on NSE amounting to value of ₹59.25 crore during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the buyers, leading to the sharp spike in the stock price. The stock closed the day with pending buy orders of 57,945 shares on the NSE with no corresponding sellers.

Price volume story on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 11th September 2023. On Day-1 of listing, Ratnaveer Precision Engineering Ltd touched a high of ₹134.40 on the NSE and a low of ₹123. The premium to the listing price sustained for better part of the day barring the brief period when the stock slightly dipped below the IPO listing price. Mainboard IPOs normally do not have any upper circuit of 5%, unlike SME IPOs, but in the case of Ratnaveer Precision Engineering Ltd, the exchange had imposed a 5% filter circuit on the stock. If you look at the range of prices, the opening price was above the low price of the day while the stock closed the day exactly at the high price of the day. The strong post-listing performance of the IPO stock was supported by robust markets with the Sensex gaining more than 528 points during the day. On Day-1 of listing, the Ratnaveer Precision Engineering Ltd stock traded a total of 16.98 lakh shares on NSE amounting to value of ₹22.10 crore during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the buyers, leading to the sharp spike in the stock price. The stock closed the day with pending buy orders on the BSE with no corresponding sellers.

 Market capitalization, free float, and delivery volumes

While the volumes on the BSE were not as much as on the NSE, the trend was once again the same. The order book through the day showed a lot of strength even at higher levels, which eventually led to the stock closing at the 5% upper circuit for the day. The sharp bounce in the Nifty and the Sensex from lower levels did help the fortunes of the stock to an extent on the listing day. On the NSE, out of the total 46.74 lakh shares traded during the first day of trading, the deliverable quantity represented the entire 46.74 lakh shares or a deliverable percentage of 100% on the NSE, due to the stock being in the BE segment on the NSE implying mandatory delivery trades only. Even on the BSE, out of the total 16.98 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 100% for the same reason of the stock being in the trade to trade segment or the T2T segment with only mandatory delivery allowed in the counter.

At the close of Day-1 of listing, Ratnaveer Precision Engineering Ltd had a market capitalization of ₹651.83 crore with free-float market cap of ₹156.44 crore. Ratnaveer Precision Engineering Ltd has issued capital of 484.99 lakh shares with a face value of ₹10 per share.

Brief on Ratnaveer Precision Engineering Ltd

Ratnaveer Precision Engineering Ltd was incorporated in the year 2002 and the company currently manufactures stainless steel finished sheets, washers, solar roofing hooks, pipes, and tubes. Most of its specialized products are stainless based products. It customizes such stainless products for use in industries like automobiles, solar power, wind energy, power plants, hydrocarbons, pharmaceuticals, plumbing, instrumentation, electromechanics, architecture, building & construction etc. Some of its new product launches include circlip, spring washers, retaining rings, toothed lock washers, serrated lock washers etc. The company produces more than 2,500 washers in different sizes and adhering to international standards. The company is also a star rate export house, recognized by government of India. In the last 5 years, the company has achieved CAGR growth of 75%.

Ratnaveer Precision Engineering has 4 manufacturing units. Out of these,  two manufacturing units i.e., Unit-I and Unit-II are located at the Gujarat Industrial Development Corporation (GIDC), Vadodara, Gujarat. The third unit; Unit-III is located at Waghodia, which is also in Vadodara, Gujarat. The fourth unit, Unit-IV, is located at GIDC, Vatva near to the commercial capital of Ahmedabad. Broadly, Ratnaveer Precision Engineering Ltd manufacturers SS finishing sheets, SS washers and SS solar mounting hooks at Unit I, while it manufactures SS pipes & tubes at Unit II. The remaining two units viz. Unit III and Unit IV are dedicated to the backward integration process, which actually supply inputs to Unit 1 and 2. Unit III is the melting unit where melted steel scrap is turned into steel ingots, and Unit IV is the rolling unit where flat ingots are further processed into SS sheets; the principal raw materials for SS washers.

The fresh portion of the IPO will be used to fund the working capital gaps in the company. The issue of Ratnaveer Precision Engineering Ltd will be lead managed by Unistone Capital Private ltd. For managing the shareholder records, Link Intime India Private Ltd will be the registrars to the issue.