The Rajesh Power Services Limited IPO opens on November 25, 2024, and closes on November 27, 2024, offering a book-built issue of ₹160.47 crores. The company is offering a Fresh Issue of 27.90 lakh shares worth ₹93.47 crores and an Offer for Sale (OFS) of 20 lakh shares totaling ₹67 crore. The price band for the IPO is ₹319 to ₹335 per share, with the market capitalization at ₹603.25 crore at the upper price band.

Rajesh Power Services IPO Subscription and Allotment Details

The lot size for the IPO is 400 shares, with a minimum investment of ₹1,34,000 for retail investors. High-Net-Worth Individuals (HNIs) must invest in at least 2 lots (800 shares), totaling ₹2,68,000. As of November 27, 2024, the IPO has been subscribed 7.08 times, signaling a decent level of demand.

The Grey Market Premium (GMP) for the Rajesh Power Services IPO stands at ₹65, or 20%, suggesting some potential for listing gains. However, the Grey Market Premium is based on unorganized market trends and is not a guaranteed indication of future performance.

Company Overview and Financial Performance

Rajesh Power Services (RPSL) is a key player in the engineering, procurement, and construction (EPC) sector for both renewable (solar) and non-renewable energy projects. The company specializes in turnkey projects, including the installation of EHV cables, transmission lines, substations, and underground power distribution systems. It also offers operations and maintenance services for solar plants and EHV substations.

For the fiscal years 2024, 2023, and 2022, and the quarter ending September 30, 2024, the company reported:

• Revenue: ₹31,785.09 lakhs (Q2 FY24), ₹29,506.07 lakhs (FY24), ₹21,117.57 lakhs (FY23), and ₹14,936.84 lakhs (FY22).
• EBITDA: ₹4,205.04 lakhs (Q2 FY24), ₹4,404.68 lakhs (FY24), ₹1,800.47 lakhs (FY23), and ₹1,35.09 lakhs (FY22).
• Profit After Tax (PAT): ₹2,768.25 lakhs (Q2 FY24), ₹2,802.29 lakhs (FY24), ₹675.15 lakhs (FY23), and ₹344.60 lakhs (FY22).

The company's strong revenue growth, particularly in the quarter ended September 2024, underscores its expansion in the power infrastructure market.

Valuation and Market Outlook

For the Rajesh Power Services IPO, the pre-issue EPS stands at ₹17.01, and the post-issue EPS is expected to be ₹15.56. The P/E ratio at the issue price is 19.59x (pre-issue) and 21.53x (post-issue), which is considered fully priced relative to industry standards.

The company’s Return on Capital Employed (ROCE) for FY24 is 29.99%, and the Return on Equity (RoE) is 36.41%, indicating efficient utilization of capital. However, these metrics, combined with the fully priced IPO, suggest that the upside may be limited for long-term investment.

Objectives of the Rajesh Power Services IPO

The proceeds from the Fresh Issue will be utilized for:

1. ₹2,510.93 Lakhs for capital expenditure, including:
   • ₹1,794.82 Lakhs for purchasing cable identification, testing, and fault location equipment.
   • ₹416.11 Lakhs for setting up a 1,300 KW DC Solar Power Plant.
   • ₹300.00 Lakhs for in-house development of green hydrogen technology and equipment.
2. ₹3,000 Lakhs for additional working capital.
3. The remainder will be used for general corporate purposes.
   
   

   The Upcoming IPOs in this week and coming weeks are  Agarwal Toughened, Ganesh Infraworld, Suraksha Diagnostic, Property Share REIT, Rosmerta Digital, Avanse Financial and Nisus Finance.

   The Current active IPO is Apex Ecotech, Abha Power and Steel, Rajputana Biodiesel, and Rajesh Power Services.

Rajesh Power Services IPO Review and Investment Advice

The Rajesh Power Services IPO presents a solid business with expertise in power infrastructure and renewable energy projects. While the company has reported consistent revenue growth and strong profitability, the IPO appears fully priced based on its valuation. With a pre-issue P/E ratio of 19.59x and a post-issue P/E ratio of 21.53x, the investment upside appears limited.

Given the 20% GMP, there is some potential for listing gains, but for long-term investment, the high valuation relative to peers suggests that investors may want to avoid this IPO unless they are interested in short-term speculation. Investors should consider alternative opportunities if they are looking for long-term growth potential in the power sector.

To check your Rajesh Power Services IPO allotment status, visit the Registrar Website after the allotment date of November 28, 2024. You can enter your application number, PAN, or DP Client ID to track your allotment. Stay updated on the live subscription status and IPO developments at BSE SME.

For those interested in exploring financial independence, investment opportunities, and learning about current affairs, platforms like Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today provide excellent resources for growing your knowledge and wealth. Additionally, staying informed through Top News Headlines - Share Market News, Latest IPO News, Business News, Economy News can keep you updated on the latest trends in the world of finance.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst & Finance Saathi Telegram Channel for regular Share Market, News & IPO Updates.

Start your Stock Market Journey and Apply in IPO by Opening a Free Demat Account in Choice Broking FinX.