Rosmerta Digital Services, an innovative division of the Rosmerta Group, is set to launch its IPO with a price band of ₹140 to ₹147 per share. This IPO, a Book Built Issue amounting to ₹206.32 Crores, consists entirely of a fresh issue of 140.36 lakh shares. The subscription period for the IPO is yet to be announced. The lot size is set at 1,000 shares, with retail investors required to invest a minimum of ₹1,47,000. For High-Net-Worth Individuals (HNIs), the minimum investment is ₹2,94,000 for two lots (2,000 shares).

The company has received significant attention, raising ₹58.77 Crores from Anchor Investors at a price of ₹147 per share. However, the Grey Market Premium (GMP) is currently 0, indicating no expected listing gains. This means investors should be cautious about relying on the grey market as an indicator for price discovery, as it depends entirely on unorganized supply and demand.

The objectives of the IPO proceeds include:

• ₹1,98,625.00 Thousand for funding capital expenditure for the purchase of office space in Mumbai.
• ₹98,275.00 Thousand for setting up warehouses, workshops, and experience centers across India.
• ₹1,38,480.00 Thousand for IT infrastructure development.
• ₹7,50,000.00 Thousand for working capital requirements and inorganic growth via acquisitions.

Financially, the company has seen significant growth in recent years. For the period ending September 30, 2024, revenues amounted to ₹9,25,357.00 Thousand, with EBITDA at ₹2,02,438.00 Thousand and profit after tax (PAT) of ₹1,48,372.00 Thousand. These figures mark strong growth from previous years. In FY24, the EBITDA was ₹1,53,634.00 Thousand, while PAT stood at ₹1,05,652.00 Thousand. This revenue trajectory is impressive, showing an expanding business, especially in E-governance, Transport, and Road Safety sectors.

However, the pre-issue P/E ratio is 48.84x, and the post-issue P/E ratio is 73.47x, which is significantly lower than the industry P/E ratio of 282x. Despite these high multiples, the company’s Return on Capital Employed (ROCE) and Return on Equity (RoE) for FY24 are relatively low at 1.03% and 1.53%, respectively. This suggests that while the company is growing, it may face challenges in generating strong returns relative to its market valuation.

The Upcoming IPOs in this week and coming weeks are Dhanlaxmi Corp, Jungle Camps, Toss The Coin, Purple United, Rosmerta Digital and Avanse Financial.

The Current active IPO is Nisus Finance and Emerald Tyre Manufacturers.

Given the low GMP and the high P/E ratios, our analysis suggests that this IPO may not be ideal for those seeking short-term listing gains or long-term investment returns. The current valuation might indicate that the stock is fully priced, making it a less attractive option for risk-averse investors.

In conclusion, we recommend investors avoid the Rosmerta Digital Services IPO if they are looking for substantial listing gains or long-term growth. However, if you're intrigued by the company’s future potential and strategic initiatives, the IPO could still be worth considering with a risk-aware mindset.

For IPO allotment status, check the Registrar's website once the allotment date is announced. You can also explore further information regarding the Rosmerta Digital Services IPO and other latest IPO updates at Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News - Finance Saathi. Stay informed with the latest share market news by visiting Top News Headlines - Share Market News, Latest IPO News, Business News - Finance Saathi.

Join the Finance Saathi Telegram Channel for live updates and expert trading tips, or explore more details about stock market investment opportunities with Choice Broking FinX.