Rajputana Biodiesel Limited (RBL), a leading manufacturer and supplier of biofuels and by-products such as glycerine and fatty acids, is launching an IPO with a Book Built Issue amounting to ₹24.70 Crores. The IPO consists entirely of a Fresh Issue of 19 Lakh shares. The subscription period for this IPO is open from November 26, 2024, to November 28, 2024, and the allotment date is expected to be finalized by November 29, 2024. The shares will be listed on the NSE SME with a tentative listing date of December 3, 2024.

The price band for the Rajputana Biodiesel IPO is set at ₹123 to ₹130 per equity share. At the upper price of ₹130, the company’s market capitalization will be ₹91.44 Crores. The lot size is 1,000 shares, with retail investors needing to invest a minimum of ₹1,30,000 and HNIs required to invest in a minimum of 2 lots (2,000 shares), amounting to ₹2,60,000.

Operating from a 4,000 sq. m. facility in Phulera, Rajasthan, Rajputana Biodiesel has an approved production capacity of 30 KLPD and an installed capacity of 24 KLPD. The company has a flexible manufacturing setup that accommodates various feedstocks, enabling it to respond quickly to changes in market demand. Rajputana is actively exploring export opportunities to expand its market presence and contribute to the renewable energy sector.

The company is led by Mr. Sarthak Soni, the Managing Director and one of the promoters, who has over 7 years of experience in the biodiesel industry. Mr. Sudeep Soni, the Chairman and Executive Director, brings 24 years of experience in real estate and gems and jewelry along with 7 years in the biodiesel industry.

In terms of financial performance, Rajputana Biodiesel showed significant growth. For the fiscal year 2024, 2023, and 2022, the company reported revenues of ₹5,367.51 Lakhs, ₹2,354.06 Lakhs, and ₹1,746.07 Lakhs, respectively. The EBITDA for the same periods was ₹766.91 Lakhs, ₹350.66 Lakhs, and ₹161.70 Lakhs. The Profit After Tax (PAT) for FY24 was ₹452.43 Lakhs, reflecting steady growth from ₹19.97 Lakhs in FY22.

For the Rajputana Biodiesel IPO, the company is issuing shares at a pre-issue EPS of ₹9.16 and post-issue EPS of ₹6.43. The pre-issue P/E ratio is 14.19x, and the post-issue P/E ratio is 20.21x, while the industry P/E ratio is 31x, signaling that the IPO is reasonably priced relative to industry standards. The company’s Return on Capital Employed (ROCE) for FY24 is 22.19%, and its Return on Net Worth (RoNW) stands at 34.43%, indicating strong profitability and capital efficiency.

The Upcoming IPOs in this week and coming weeks are Property Share REIT, Rosmerta Digital, Avanse Financial and Nisus Finance.

The Current active IPO is Ganesh Infraworld, Suraksha Diagnostic, Agarwal Toughened, Apex Ecotech, Abha Power and Steel.

The Grey Market Premium (GMP) for Rajputana Biodiesel IPO is currently at ₹30, suggesting a potential listing gain of around 23%. However, investors should be cautious as the GMP reflects market demand and is not an accurate predictor of the final listing price, which will be determined upon the official listing.

Rajputana Biodiesel IPO Allotment Status will be available on November 29, 2024, and can be checked through the registrar's website. To check the allotment status, investors can enter their application number, PAN, or DP Client ID.

Objectives of Rajputana Biodiesel IPO: The proceeds from the Rajputana Biodiesel IPO will be used for the following purposes:

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

Investment Recommendation: Given the company's strong financial performance, reasonable IPO pricing, and listing gain potential of 23%, we recommend the Rajputana Biodiesel IPO for risky investors looking for listing gains. However, safe traders may consider avoiding this IPO due to the risk associated with short-term fluctuations.

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