Rosmerta Digital Services, part of the prominent Rosmerta Group, is known for its leadership in E-governance, Transport, and Road Safety in India. The company is now preparing for its Initial Public Offering (IPO), aiming to raise ₹206.32 crores through a fresh issue of 140.36 lakh shares. The IPO is expected to focus on cutting-edge technology solutions to cater to various sectors, aiming to positively impact the lives of 100 million Indians by 2030.

Rosmerta Digital Services IPO Details

The price band for the IPO is set between ₹140 to ₹147 per equity share, with a market capitalization of ₹780.36 crores at the upper price band. Retail investors will need to invest a minimum of ₹1,47,000 for 1,000 shares, while high-net-worth individuals (HNIs) are required to apply for at least two lots, totaling ₹2,94,000. The lot size for the IPO is 1,000 shares.

The IPO is managed by NARNOLIA FINANCIAL SERVICES LIMITED and BEELINE CAPITAL ADVISORS PRIVATE LIMITED as book-running lead managers. Link Intime India Private Limited serves as the registrar, and Spread X Securities Private Limited is the market maker.

Rosmerta Digital Services IPO Subscription and Grey Market Premium

The subscription period for the IPO has yet to be announced. As of now, the Grey Market Premium (GMP) is reported to be ₹0, suggesting no immediate listing gains expected. The IPO has no price movement in the Grey Market, indicating that market sentiment remains neutral. It’s important to note that the GMP is an unofficial metric and does not guarantee any future performance upon listing.

Rosmerta Digital Services Financials

The company has demonstrated impressive growth, with revenues of ₹9,25,357 thousand for the period ending September 30, 2024, compared to ₹8,41,907 thousand in FY 2024. The EBITDA for the same period was ₹2,02,438 thousand, showing substantial profitability compared to previous years. The profit after tax (PAT) for the period ending September 30, 2024, was ₹1,48,372 thousand, a sharp increase from earlier years.

The company’s pre-issue EPS stands at ₹3.00, while the post-issue EPS is expected to be ₹2.00. The pre-issue P/E ratio is 48.84x, and the post-issue P/E ratio is 73.47x, which is relatively high when compared to the industry P/E ratio of 282x. These valuation figures suggest that the IPO is fully priced, and may not offer significant listing gains based on current market conditions.

Objectives of the IPO

The funds raised through the IPO will be allocated to the following key areas:

1. Capital Expenditure for Office Space – ₹198.63 crores for purchasing office space in Mumbai.
2. Infrastructure Development – ₹98.28 crores for setting up warehouses, model workshops, and experience centers across India.
3. IT Infrastructure – ₹138.48 crores to improve technological capabilities.
4. Working Capital – ₹75 crores for enhancing the company’s operational capacity.
5. Inorganic Growth and Strategic Acquisitions – Funds will also be directed toward acquisitions and other corporate purposes.

Investment Recommendation

Given the high valuation of the IPO and the neutral Grey Market Premium, we recommend caution to investors. The company’s financial growth and robust industry presence suggest that it could be a stable long-term investment, but the listing gains may not be substantial. Risk-averse investors should consider waiting for further updates on the IPO’s subscription status and potential market reactions before committing capital.

In conclusion, the Rosmerta Digital Services IPO may be suitable for investors seeking long-term exposure to the growing Indian tech sector, but we advise avoiding the IPO for quick listing gains based on the current market sentiment.