Rishabh Instruments lists at Rs 460, only 4% premium to issue price

Rishabh Instruments was listed on the stock exchange at a premium of 4.3% on September 11. The stock started trading at Rs 460.05 on NSE and Rs 460 on BSE, while the issue price Its 441 Rs.
Meanwhile, black market premiums showed a 12% increase in listings.
Energy saving solutions company focusing on electrical automation, measurement, measurement and precision engineering products. It supplies the energy, automotive and industrial sectors through its five manufacturing plants. On the last day of the auction, Rishabh Instruments’ IPO was subscribed 31.65 times, receiving bids for 24.65 crore shares against the issue size of 77.9 lakh shares. For the financial year ending March 2023, the company reported good top-line growth with operating revenue growing 21.1% year-on-year to Rs 569.5 crore, but profits were almost flat. unchanged at Rs 49.69 crore compared to Rs 49.65 crore in the same period, impacted by low operating margins due to high input costs and employee costs.
Analysts believe the stock has solid long-term value. At a higher price, the company is fairly valued with a price-to-earnings ratio of 34.3 times fiscal 2023 earnings, they said.
“The company operates in large potential markets and can benefit from the industrialization trend,” Anand Rathi Limited said. “As a private company, the company can benefit from scarcity premium and long-term investors are advised to subscribe to the issue,” SBI Securities said.
Rishabh Instruments has set a target of reaching Rs 1,000 crore, along with improved margins of 20%, over the next two years, by FY 25-26.
In an interview with Moneycontrol ahead of the IPO, the company’s chairman, Narendra Goliya, explained that since the company’s fixed costs account for 30% of total costs and revenues are still growing, margins will only increase .
However, according to brokers, the company is heavily dependent on its subsidiaries as these generated 67.09% of its total revenue as of FY23, which is a key risk.