The Rajputana Biodiesel IPO is generating significant attention in the market, with a fresh issue of 19 lakh shares offering a total issue size of ₹24.70 Crores. This offering marks a significant milestone for the biofuels company, which specializes in the production and supply of biodiesel and by-products like glycerine and fatty acids. Rajputana Biodiesel’s operations are based out of its 4,000 sq. m. facility in Phulera, Rajasthan, where it operates with an approved production capacity of 30 KLPD (kiloliters per day) and an installed capacity of 24 KLPD.

The subscription period for the Rajputana Biodiesel IPO opened on November 26, 2024, and closed on November 28, 2024. The share price for the IPO is set between ₹123 and ₹130 per equity share, with an expected market capitalization of ₹91.44 Crores at the higher price band of ₹130 per share. The lot size is 1000 shares, and the minimum investment for retail investors is ₹1,30,000, while High-Net-Worth Individuals (HNIs) are required to invest a minimum of ₹2,60,000.

As of the final day of the subscription period, the IPO was oversubscribed by 645.81 times, a strong indication of investor interest. The allotment process is expected to be completed by November 29, 2024, and the shares are slated for listing on the NSE SME on December 3, 2024.

Financial Highlights and Market Performance

Rajputana Biodiesel has demonstrated steady growth in its financial performance, with a revenue increase from ₹1,746.07 Lakhs in FY2022 to ₹5,367.51 Lakhs in FY2023. For the quarter ending July 31, 2024, the company reported a revenue of ₹2,779.18 Lakhs, and a profit after tax (PAT) of ₹259.59 Lakhs. The EBITDA for the same period stood at ₹421.91 Lakhs, reflecting solid operational profitability.

For the IPO, the company has a pre-issue EPS of ₹9.16, which is expected to drop to a post-issue EPS of ₹6.43. With a pre-issue P/E ratio of 14.19x and a post-issue P/E ratio of 20.21x, the IPO valuation is attractive, particularly compared to the industry P/E ratio of 31x. The Return on Capital Employed (ROCE) stands at 22.19% for FY24, and the Return on Net Worth (RoNW) is an impressive 34.43%.

Grey Market Premium (GMP) and IPO Review

The Grey Market Premium (GMP) for the Rajputana Biodiesel IPO is currently ₹30, indicating a potential listing gain of 23%. While the GMP is a market sentiment indicator, it is important to note that trading in the grey market carries inherent risks and should not be the sole factor in making investment decisions.

Considering the financial performance, growth potential, and the valuation metrics, the Rajputana Biodiesel IPO appears to be fairly priced. However, as the GMP reflects potential gains, risk-taking investors may find the IPO attractive for listing gains, while more conservative investors may consider avoiding the offering, especially in the case of market volatility.

Rajputana Biodiesel IPO Allotment Process and Instructions

The Rajputana Biodiesel IPO allotment date is set for November 29, 2024. Investors can check the allotment status on the registrar’s website by entering their application number, PAN, or DP Client ID. This allows investors to verify if they have been allotted shares and proceed accordingly.

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Objectives of the Rajputana Biodiesel IPO:

The funds raised through the fresh issue will be utilized for various purposes, including:

1. ₹420 Lakhs to extend a loan to the subsidiary, Nirvaanraj Energy Private Limited (NEPL), for the expansion of its existing unit.
2. ₹1,220 Lakhs to meet the working capital requirements of the company.
3. The remaining proceeds will be used for general corporate purposes and to cover the issue expenses.

Conclusion

The Rajputana Biodiesel IPO offers investors an opportunity to participate in the renewable energy sector, particularly in the rapidly growing biodiesel industry. With a strong financial track record, reasonable pricing, and potential for listing gains, the IPO holds appeal for investors with a higher risk tolerance. However, investors are advised to proceed with caution, especially those seeking long-term investment, as the company is still in its expansion phase.

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