The Rajesh Power Services Limited (RPSL) IPO is one of the most anticipated Initial Public Offerings in the engineering, procurement, and construction (EPC) sector. The company provides engineering, procurement, and construction services for both renewable and non-renewable power sectors, with a strong focus on turnkey projects. These include the installation of Extra High Voltage (EHV) cables, transmission lines, substations, and underground power distribution systems. RPSL also offers operation and maintenance services for solar plants and EHV substations. In addition, the company specializes in cable fault detection, transformer retrofitting, and consultancy services for power substation and cable system designs.

Rajesh Power Services IPO is a Book Built Issue amounting to ₹160.47 Crores, consisting of a Fresh Issue of 27.90 lakh shares worth ₹93.47 Crores and an Offer for Sale of 20.00 lakh shares totaling ₹67.00 Crores. The subscription period for the IPO opens on November 25, 2024, and closes on November 27, 2024. The allotment date is scheduled for November 28, 2024, with a listing date set for December 2, 2024 on the BSE SME platform.

The price band for the IPO is set at ₹319 to ₹335 per equity share, and the minimum lot size is 400 shares, which means the minimum investment for retail investors is ₹1,34,000. For High-Net-Worth Individuals (HNIs), the minimum investment is ₹2,68,000 (2 lots or 800 shares).

At the upper end of the price band, the market capitalization of Rajesh Power Services at the IPO price of ₹335 per share will be approximately ₹603.25 Crores, which places the company in a promising position within the power sector. ISK Advisors Private Limited is the book-running lead manager, while Bigshare Services Private Limited is the registrar for the issue. Sunflower Broking will act as the market maker for the Rajesh Power Services IPO.

Grey Market Premium (GMP) and Listing Expectations

The Grey Market Premium (GMP) for the Rajesh Power Services IPO is currently expected to be ₹65 (about 20%) based on the company’s financial performance. However, it’s important to note that trading on the Grey Market is unregulated, and price discovery before the listing should not be relied upon for investment decisions. The GMP is purely for informational purposes and can fluctuate due to demand and supply dynamics in the unorganized market.

Subscription Status and Anchor Investors

As of 12:20 PM on 25 November 2024, the Rajesh Power Services IPO live subscription status shows that the IPO subscribed 0.54 times on its First day of subscription period. Check the Rajesh Power Services IPO Live Subscription Status Today at BSE.

Additionally, the company has already raised ₹44.77 Crores from Anchor Investors at the upper price band of ₹335 per share, allocating 13,36,400 equity shares to these investors. This is a strong signal of interest in the IPO, and investors can expect to see solid backing from Qualified Institutional Buyers (QIBs) as well.

The Current active IPO is Rajesh Power Services, C2C Advanced System, Enviro Infra Engineers and Lomosaic India.

IPO Allotment Process

The Rajesh Power Services IPO allotment date is set for November 28, 2024. To check the status of your allotment, investors can visit the registrar's website and enter their application number, PAN, or DP Client ID. The detailed guide for checking allotment status will be available online for those who applied for the IPO.

Utilization of Proceeds from the IPO

The fresh issue proceeds of the Rajesh Power Services IPO will be used for several purposes:

1. Capital Expenditure: A significant portion will be utilized for purchasing cable identification, testing, and fault location equipment (₹1,794.82 Lakhs). Additionally, ₹416.11 Lakhs will be spent on setting up a 1,300 KW DC Solar Power Plant, while ₹300.00 Lakhs will be allocated to green hydrogen production and associated equipment like electrolysers.

2. Additional Working Capital: ₹3,000 Lakhs will be allocated to improve the company’s operational capacity and ensure smooth operations across its projects.

3. General Corporate Purposes: The balance will be utilized for general corporate requirements.
   
   The Upcoming IPOs in this week and coming weeks are Rajputana Biodiesel, Apex Ecotech, Abha Power and Steel, Agarwal Toughened, Ganesh Infraworld, Rosmerta Digital, Avanse Financial and Nisus Finance.

Financial Overview of Rajesh Power Services

Rajesh Power Services has demonstrated impressive financial growth, with the company’s revenue for the quarter ended September 30, 2024 standing at ₹31,785.09 Lakhs, a significant increase from ₹14,936.84 Lakhs in FY22. The EBITDA for the same quarter was ₹4,205.04 Lakhs, reflecting strong profitability. Moreover, the company has shown a profit after tax (PAT) of ₹2,768.25 Lakhs for the quarter ending September 30, 2024.

The pre-issue earnings per share (EPS) is ₹17.01, and the post-issue EPS is projected to be ₹15.56, with a pre-issue P/E ratio of 19.59x and a post-issue P/E ratio of 21.53x. These ratios are considered reasonable for the power sector, and the company’s return on capital employed (ROCE) and return on equity (RoE) for FY24 are robust at 29.99% and 36.41%, respectively.

IPO Investment Recommendation

Given the company’s strong financial performance, experienced management team, and promising growth prospects in both renewable and non-renewable energy sectors, we recommend investors to apply for the Rajesh Power Services IPO. The IPO offers potential listing gains due to its current Grey Market Premium of 20%, and long-term investors can also benefit from the company’s strong foothold in the power infrastructure space.

The Upcoming IPOs in this week and coming weeks are Rajputana Biodiesel, Apex Ecotech, Abha Power and Steel, Agarwal Toughened, Ganesh Infraworld, Rosmerta Digital, Avanse Financial and Nisus Finance.

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