Rajputana Biodiesel, a company specializing in manufacturing and supplying biofuels and by-products such as glycerine and fatty acids, made a strong debut on the NSE SME platform on December 3, 2024. The shares were listed at a 90% premium, at ₹247 per share, against the issue price of ₹130. This promising start was further boosted as the stock surged, hitting the upper circuit limit of ₹259.35, which reflects a remarkable gain of 90% on the debut day.

IPO Overview and Financial Details

The Rajputana Biodiesel IPO was entirely a fresh issue, offering 19 lakh shares to raise ₹24.7 Crores. The issue opened on November 26, 2024, and closed on November 28, 2024. The issue price was set in the range of ₹123 to ₹130 per equity share, with the market capitalization pegged at ₹91.44 Crores based on the upper price band.

The IPO was a Book Built Issue managed by GYR Capital Advisors Private Limited, with Maashitla Securities Private Limited acting as the registrar. The market maker for the IPO was Giriraj Stock Broking. The IPO attracted significant interest, and its subscription rate reached an impressive 645.81 times on the last day of bidding.

IPO Subscription and Market Performance

Rajputana Biodiesel's IPO grey market premium (GMP) indicated a 23% potential listing gain, reflecting positive demand among investors before listing. On listing day, the stock's performance reaffirmed this expectation, with the shares listing at ₹247 and climbing to ₹259.35, showing robust investor interest and a strong market debut.

Company Operations and Industry Focus

Rajputana Biodiesel operates out of a state-of-the-art facility in Phulera, Rajasthan, spanning 4,000 sq. m. and with an approved production capacity of 30 KLPD. The company specializes in manufacturing biofuels and its by-products, primarily glycerine and fatty acids, which are used across various industries. The company’s manufacturing capabilities allow it to adapt to market demands, utilizing multiple feedstocks to ensure flexibility.

The company has also been exploring export opportunities to broaden its market reach, aiming to contribute significantly to the renewable energy sector. This diversification could help secure future growth prospects, especially as the demand for biofuels and sustainable energy solutions rises globally.

Management and Financial Growth

The Rajputana Biodiesel IPO attracted investor interest, thanks to the leadership of its promoters, Mr. Sarthak Soni and Mr. Sudeep Soni. The Managing Director, Mr. Sarthak Soni, brings over 7 years of experience in the biodiesel industry, while Mr. Sudeep Soni, with over 24 years in real estate and gems and jewellery, also contributes his expertise to the company's growth in the biodiesel sector.

Looking at the company’s financial performance, it has demonstrated steady growth. For the fiscal year 2024, the revenue for the quarter ending July 31, 2024 stood at ₹2,779.18 Lakhs, up from ₹1,746.07 Lakhs in fiscal 2022. The company also reported EBITDA of ₹421.91 Lakhs and Profit After Tax (PAT) of ₹259.59 Lakhs for the same period, showcasing its growing profitability.

The pre-issue EPS of ₹9.16 and post-issue EPS of ₹6.43 suggest that the IPO is priced attractively. The P/E ratio post-issue stands at 20.21x, compared to the industry’s P/E ratio of 31x, indicating that the IPO is fairly valued.

Utilization of Funds

The funds raised through the Rajputana Biodiesel IPO will be utilized for various purposes, including:

1. ₹420 Lakhs for a loan to its subsidiary, Nirvaanraj Energy Private Limited (NEPL), to expand its existing unit.
2. ₹1,220 Lakhs will be directed towards the company’s working capital requirements.
3. The remaining funds will be used for general corporate purposes and covering issue expenses.

Conclusion: Should You Apply?

While the Rajputana Biodiesel IPO has shown strong potential, with significant demand from anchor investors and a strong debut performance, it is primarily suitable for risk-taking investors looking for short-term gains from listing premium. Investors seeking long-term stability and steady returns may want to approach this IPO cautiously, as the stock’s future depends on the company's ability to sustain growth in a highly competitive biofuel market.

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