Rulka Electricals is launching an IPO with a book-built issue worth Rs 26.40 crores. This includes a fresh issue of 8.42 lakh shares totaling Rs 19.80 crores and an offer for sale of 2.81 lakh shares totaling Rs 6.60 crores. The IPO bidding period opened on May 16, 2024, and will close on May 21, 2024.

The allotment is expected to be finalized on May 22, 2024, with the shares set to list on the NSE SME on May 24, 2024. The IPO price band is set between ₹223 and ₹235 per share. Retail investors need a minimum investment of ₹141,000 for 600 shares, while high net-worth individuals (HNI) must invest at least ₹282,000 for two lots of 1,200 shares.

Beeline Capital Advisors Pvt Ltd is serving as the book-running lead manager, Bigshare Services Pvt Ltd is the registrar, and Sunflower Broking is the market maker for this IPO.

The company intend to utilize the proceeds of the Offer:

1. To Meet Working Capital Requirement.
2. General Corporate Purpose.
3. To Meet the Offer Expenses.

Listing will enhance corporate image and visibility of brand name of the Company believing that Company will receive the benefits from listing of Equity Shares on the SME Platform of NSE. It will also provide liquidity for the existing shareholders creating a public trading market for the Equity Shares of the Company.

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About Rulka Electricals Limited

Rulka Electricals Limited is in business of turnkey projects contractor engaged in offering solution for all types of Electrical & Fire Fighting Turnkey Projects. Company offers wide range of services like Electrical Solutions, Electrical Panels, Solar EPC Contracts, Turnkey Electrical Warehousing Projects, Electric Commercial Industrial Services, Maintenance Services, Electrical Contracting and Data & Voice Cabling Installation across the Industrial Sector, Commercial, Retail and Theatre sector.

The company offers electrical contracting services for all types of industrial plants. Apart from this they also provide Annual Maintenance which are customized to meet the specific requirements of systems and operations. Which consists of technicians and engineers, ensuring that systems are consistently maintained to the highest standards.

The company offer professional solutions, encompassing design and electrical services, to cater to the needs of customers. The team comprises highly skilled and dedicated professionals. Company derives its 100% revenue from Turnkey Projects – Turnkey Project includes material and Labor both together with Engineering, Designing and Consultancy Services.

India is the third-largest producer and consumer of electricity worldwide, with an installed power capacity of 416.59 GW as of April 30, 2023. As of April 30, 2023, India’s installed renewable energy capacity (including hydro) stood at 172.54 GW, representing 41.4% of the overall installed power capacity. Solar energy contributed 67.07 GW, followed by 42.86 GW from wind power, 10.24 GW from biomass, 4.94 GW from small hydropower, 0.55 from waste to energy, and 46.85 GW from hydropower.

India's power generation witnessed its highest growth rate in over 30 years in FY23. Power generation in India increased by 8.87% to 1,624.15 billion kilowatt-hours (kWh) in FY23. According to data from the Ministry of Power, India's power consumption stood at 130.57 BU in April, 2023. The peak power demand in the country stood at 226.87 GW in April, 2023.

The coal plants registered a PLF of 73.7% for the first nine-months period in FY23 compared to 68.5% in FY22 for the same period. Thermal power plant load is estimated to improve by 63% in FY24, fuelled by strong demand growth along with subdued capacity addition in the sector.

Risk:

• Business is dependent on a few customers and the loss of, or a significant reduction in award of contracts by such customers could adversely affect the company. The top 10 customers contribute 70% of the business. Major operations in geographical region of State of Maharashtra.
• Under-construction projects may be subject to cost overruns or delays.
• India provides most of the business. (Approx. 99.9%).
• Due to the long construction periods of the projects, the operation and maintenance costs of projects may change significantly after commissioning of the assets. As the terms and conditions, including the fee structure, are generally fixed, the company may not be able to offset increases in costs, including operation and maintenance costs.
• This industry is manpower intensive and any unavailability of employees or shortage of contract labor or any strikes, work stoppages, increased wage demands by workmen or changes in regulations governing contractual labor may have an adverse impact on cash flows and results of operations.
• The top 10 suppliers contribute approx. 47% of purchases.