IPO Details

Bidding Dates

14 Feb '25 - 18 Feb '25

Minimum Investment

₹1,44,000 / 1 Lot (1200 Shares)

Price Range

₹114 - ₹120

Maximum Investment

₹1,44,000 / 1 Lot (1200 Shares)

Retail Discount

To be announced

Issue Size

₹36.00 Cr

Investor category and sub category

Retail Individual Investors (RII)  |   Non-institutional Investors (NII)  |   Qualified Institutional Buyers (QIB)  |  

Royalarc Electrodes IPO Important Dates

Important dates with respect to IPO allotment and listing

IPO Opening Date

Feb 14, 25

IPO Closing Date

Feb 18, 25

Basis of Allotment

Feb 19, 25

Initiation of Refunds

Feb 20, 25

IPO Listing Date

Feb 21, 25

About Royalarc Electrodes IPO

Royalarc Electrodes IPO is a book built issue valued at ₹36.00 crores. It is a combination of a fresh issue of 18.00 lakh shares aggregating to ₹21.60 crores and an offer for sale of 12.00 lakh shares aggregating to ₹14.40 crores. The IPO opens for subscription on February 18, 2025, and closes on February 18, 2025. The allotment is expected to be finalised on February 19, 2025, with a tentative listing date of February 21, 2025, on NSE SME.

The IPO price is set at a price band of ₹114 to ₹120 per share. Retail investors need a minimum investment of ₹1,44,000 for one lot of 1200 shares, while HNI investors must invest in at least two lots, amounting to ₹2,25,600.

Fedex Securities Private Limited is the book-running lead manager for this issue, while Kfin Technologies Limited serves as the registrar. Shreni Shares Limited is the market maker.

For detailed financial and operational information, investors can refer to the Royalarc Electrodes IPO RHP. This IPO presents an opportunity to invest in a growing enterprise listed on the SME platform.

Industry Outlook

  1. The Indian welding consumables industry is experiencing steady growth, driven by increased industrialisation, infrastructure projects, and manufacturing expansion. The demand for welding electrodes, flux-cored wires, and MIG/TIG wires is rising across sectors like railways, construction, shipbuilding, and oil and gas.
  2. Government initiatives such as "Make in India" and the National Infrastructure Pipeline (NIP) are further boosting domestic manufacturing and creating opportunities for welding solution providers. The Indian welding industry is expected to grow at a CAGR of around 6-8% over the next five years, supported by advancements in automation, robotics, and high-efficiency welding technologies.

Royalarc Electrodes IPO Objectives 

The company proposes to utilise the net proceeds from the IPO for the following objectives:

  1. Funds will be allocated to expand and upgrade manufacturing facilities, improving efficiency and increasing production output to meet rising market demand.
  2. A portion of the proceeds will be utilised to repay outstanding borrowings, reducing the company's financial liabilities and enhancing its overall financial health.
  3. The proceeds will be used to modernise equipment and adopt advanced manufacturing technologies, improving quality, efficiency, and sustainability.
  4. The company will use part of the funds to meet its day-to-day operational expenses, ensuring smooth business operations and better cash flow management.
  5. Investment will be made in research and development to introduce innovative welding solutions and enhance product offerings.
  6. Strengthening the distribution network and market reach to expand domestic and international sales.
  7. Enhancing working capital reserves to ensure smooth operations and financial stability.

About Royalarc Electrodes Limited 

Royal Arc Electrodes Limited was incorporated on January 15, 1996, as Royalarc Electrodes Private Limited and later converted into a public limited company on March 9, 2005. The company is headquartered at 72 B, Bombay Talkies Compound, S.V. Road, Malad West, Mumbai, Maharashtra, 400064.

It is engaged in the manufacturing of welding consumables, including welding electrodes, flux-cored wires, and MIG/TIG wires, catering to multiple industries. The company's products are used in critical industries such as railways, shipbuilding, oil and gas, construction, and heavy engineering.

Its manufacturing facility in Umbergaon, Gujarat, is spread over 25,082.61 sq. meters and is equipped with advanced automation and quality control systems. The company is ISO 9001:2015 certified, ensuring adherence to stringent quality standards and international benchmarks.

Royal Arc Electrodes Limited operates a strong B2B business model, supplying to major industrial clients and government projects. The IPO proceeds will be utilised for expanding manufacturing capacity, reducing debt, and strengthening financial stability to support long-term business growth.

How To Check the Allotment Status of the Royalarc Electrodes IPO?

Steps to check IPO allotment status on Angel One’s app:

  1. Log in to the Angel One app.
  2. Go to the IPO Section and then to IPO Orders.
  3. Select the individual IPO that you had applied for and check the allotment status.
  4. Angel One will notify you of your IPO allotment status via push notification and email.

How To Apply for Royalarc Electrodes IPO Online?

  1. Login to Your Angel One Account: Open the Angel One app or website and log in with your credentials.
  2. Locate the IPO Section: Navigate to the 'IPO' section on the platform.
  3. Select IPO: Find and select the Royalarc Electrodes IPO from the list of open IPOs.
  4. Enter the Lot Size: Specify the number of lots you want to bid for.
  5. Submit Your UPI ID: Enter your UPI ID to link your payment method and submit your application.
  6. Approve Funds: Once you receive the bid request on your UPI app, approve it by entering your UPI PIN.

Contact Details of Royalarc Electrodes IPO 

Registered office: 72 B, Bombay Talkies Compound, S.V. Road, Malad West, Mumbai, Maharashtra, India, 400064

Phone: +91 78880 00553

E-mail: cs@royalarc.in

Royalarc Electrodes IPO Lot Size

Application

Lots

Shares

Amount

Retail (Min)

1

1200

₹1,44,000

Retail (Max)

1

1200

₹1,44,000

HNI (Min)

2

2400

₹2,25,600

Royalarc Electrodes IPO Reservation

Investor Category

Shares Offered

QIB Shares Offered

Not more than 50% of the Net Offer

Retail Shares Offered

Not less than 35% of the Net Offer

NII (HNI) Shares Offered

Not less than 15% of the Net Offer

Royalarc Electrodes IPO Promoter Holding

Bipin Sanghvi, Tarulata Sanghvi, Hardik Sanghvi and Swagat Sanghvi are the promoters of the company.

Share Holding Pre-Issue

99.99%

Share Holding Post Issue

72.96%

Key Performance Indicators for Royalarc Electrodes IPO

As of March 31, 2024, the market capitalisation of Royalarc Electrodes's IPO is ₹133.20 crore. Here are the KPIs of Royalarc Electrodes:

KPI

Value

RoE (%)

32.85

RoCE (%)

37.73

EBITDA Margin (%)

18.16

PAT Margin

11.95

Price Metrics

Metric

Pre-IPO

Post-IPO

EPS (₹)

4.86

5.82

P/E (x)

19.34

16.16

Note: The Pre IPO EPS is calculated based on pre-issue shareholding as of the date of RHP and the latest FY earnings as of March 31, 2024, that is available in RHP. The post-issue EPS is calculated based on the post-issue shareholding and annualized FY earnings of September 30, 2024, that are available in RHP.

Royalarc Electrodes IPO Prospectus

Royalarc Electrodes IPO Registrar and Lead Managers

Royalarc Electrodes IPO Lead Managers

  • Fedex Securities Private Limited

Registrar for Royalarc Electrodes IPO

Kfin Technologies Limited

Royalarc ElectrodesIPO Registrar

Financial Performance of Royalarc Electrodes Limited

Particulars Year ending on March 31, 2024 Year ending on March 31, 2023 Year ending on March 31, 2022
Revenue from operations (in ₹ lakh) 9,978.75 9,694.02 6,290.97
PAT (in ₹ lakh) 1,192.63 956.82 212.13
EBITDA (in ₹ lakh) 1,811.72 1,542.35 550.51
ROE (%) 32.85 37.43 10.70
ROCE (%) 37.73 41.81 12.63
Net Debt / EBITDA Ratio (x) (0.04) (0.10) 1.41
Debt Equity Ratio (x) 0.00 0.05 0.38

Know before investing

Strengths

5

  1. Royal Arc Electrodes has over 25 years of experience in the welding consumables industry, establishing a strong market presence.

  2. The company offers a diverse range of welding consumables, including welding electrodes, flux-cored wires, and MIG/TIG wires, catering to various industrial applications.

  3. Its manufacturing facility in Umbergaon, Gujarat, is equipped with advanced automation and quality control systems, ensuring high efficiency and consistent product standards.

  4. Strong leadership from its promoters, Bipin Sanghvi, Tarulata Sanghvi, Hardik Sanghvi, and Swagat Sanghvi, supports strategic decision-making and business expansion.

  5. The Indian welding consumables market is expected to grow steadily, driven by increasing infrastructure development, industrialisation, and government-led manufacturing initiatives.

Risks

5

  1. The company operates in a highly competitive welding consumables industry, facing competition from both domestic and international players, which may impact market share and profitability.

  2. Dependence on raw materials like steel and alloys exposes the company to price fluctuations, affecting production costs and profit margins.

  3. Regulatory changes, including environmental norms and industrial safety standards, could lead to increased compliance costs and operational challenges.

  4. Any disruptions in the supply chain, such as logistics delays or raw material shortages, may impact production schedules and order fulfilment.

  5. Economic downturns or reduced industrial activity in key sectors like construction, shipbuilding, and infrastructure could affect demand for welding consumables.

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Royalarc Electrodes Limited Peer Details Comparison

Company Name EBDITA Margin (%) PAT Margin (%) Return on Equity (%) Return on Capital Employed (%)
Royalarc Electrodes Limited 18.16 11.95 32.85 37.73
Ador Welding Limited 11.65 7.15 17.44 22.40
Gee Limited 8.19 3.48 6.29 9.10
Rasi Electrodes Limited 6.12 3.82 9.83 12.88
ESAB India Limited 18.83 13.11 53.25 72.91

Royalarc Electrodes IPO FAQs

What is the Royalarc Electrodes IPO?

Royalarc Electrodes IPO is a book built issue IPO. It will be open from February 14, 2025, to February 18, 2025.

When will the Royalarc Electrodes IPO be allotted?

The Basis of Allotment will happen on Wednesday, February 19, 2025. 

When will the Royalarc Electrodes IPO open for subscription?

The IPO subscription window will open on February 14, 2025.

What minimum lot size can retail investors subscribe to?

The minimum lot size retail investors can subscribe to is 1 lot, and the lot size is 1200 shares.

When will Royalarc Electrodes Limited list on exchanges?

The listing date for Royalarc Electrodes Limited is Friday, February  21, 2025.

What is the issue size of the Royalarc Electrodes IPO?

The issue size of the Royalarc Electrodes IPO is up to ₹36.00 crores, consisting of a combination of a fresh issue of 18.00 lakh shares aggregating to ₹21.60 crores and an offer for sale of 12.00 lakh shares aggregating to ₹14.40 crores.

What are the open and close dates of the Royalarc Electrodes IPO?

The open and close dates for Royalarc Electrodes IPO are from February 14, 2025, to February 18, 2025.

What would be the listing gains on the Royalarc Electrodes IPO?

Listing gains cannot be ascertained before the listing of the IPO on the stock exchange. 

How to increase your chances of getting a Royalarc Electrodes IPO allotment?

  1. Multiple Submissions: Use different Demat accounts to make multiple applications.
  2. Higher Price Band Bidding: Opt for bidding at the cut-off price or higher price band.
  3. Timely Subscription: Ensure you subscribe to the IPO within the specified time frame.

How do I approve the UPI mandate request for the Royalarc Electrodes IPO?

You must complete the payment process by logging in to your UPI handle and approving the payment mandate.

Can I submit more than one application for the public issue of Royalarc Electrodes Limited using one PAN?

You can submit only one application using your PAN card.

How to read Royalarc Electrodes Limited's financial statements?

To read Royalarc Electrodes’s financial statements, download the IPO’s  RHP document.

What is 'pre-apply' for Royalarc Electrodes Limited IPO?

Pre-apply allows investors to apply for the  Royalarc Electrodes  IPO two days before the subscription period opens, ensuring an early submission of your application.

If I pre-apply for the Royalarc Electrodes Limited IPO, when will my order get placed?

Your order will be placed when the IPO opens for bidding, and a UPI request will follow within 24 hours.

When will I know if my Royalarc Electrodes Limited IPO order is placed?

You will receive a notification once your order is successfully placed with the exchange after the bidding starts. 

Who is the registrar of Royalarc Electrodes IPO?

Kfin Technologies Limited is the registrar responsible for managing the IPO allotment process and handling investor queries.

Where is the Royalarc Electrodes IPO getting listed?

Royalarc Electrodes Limited IPO is proposed to be listed on the SME platform of the National Stock Exchange (NSE).