Incorporated in 2003, Rolex Rings Limited is one of the top five forging companies in India and a manufacturer and global supplier of hot rolled forged and machined bearing rings, and automotive components for segments of vehicles including two- wheelers, passenger vehicles, commercial vehicles, off-highway vehicles, electric vehicles), industrial machinery, wind turbines and railways, amongst other segments. The company supply domestically and internationally to large marquee customers including some of the leading bearing manufacturing companies, tier-I suppliers to global auto companies and some auto OEMs. As per ICRA Report, SKF India Limited, Schaeffler India Limited, Timken India Limited, NEI and NRB collectively account for 81% of the market share of Indian bearing industry. The company is one of the key manufacturers of bearing rings in India and cater to most of the leading bearing companies in India. As on September 30, 2021, company have three manufacturing units in Rajkot. Company's manufacturing infrastructure includes high-speed hot formers from Sakamura (such as Sakamura model HBP-160, Sakamura Model HBP – 120SS and Sakamura Model: HFW-1000-4 Hot Former) and Hatebur (such as Hatebur Hotmatic – HM75XL Hot Former and Hatebur-Hotmatic@ HM 35 Machine) and vertical forging lines from Manyo (Manyo 600 tons Auto Forging Press), Mistubishi, SMS Meer (such as SMS MEER Ring Rolling line), Enomoto (such as Enomoto Model 1000 ZESH and Servo Motor Driven Screw Press 16000 kN), Eumoco and conventional forging lines integrated with induction heating furnaces. A large part of company's existing machining lines consist of spindles from DMG, FUJI, ACE, TSUGAMI, Hyundai, Mazak, Muratec and domestic CNC Turning centres as well. As on date of RHP, the company have 22 forging lines with a combined installed capacity of 1,44,750 MTPA, machining facilities consisting of 528 spindles with a combined installed capacity of 69 million parts per annum and other machinery including heat treatment furnaces, cold rolling machines and other infrastructure. As per financial performance, Rolex has posted total income/net profits (loss) of Rs. 791.54 cr. / Rs. 72.90 cr. (FY18), Rs. 911.25 cr. / Rs. 59.01 cr. (FY19), Rs. 675.33 Cr. / Rs. 52.76 Cr. (FY20) and Rs. 619.75 Cr. / Rs. 86.95 Cr. (FY21). So company has shown declining trends in sales. Company has posted an average EPS of Rs. 29.59 and average RoNW of 23.34% for last three fiscals. Issue is priced at a P/BV of 6.05 as per NAV of 148.76 on 31.03.21. As per FY21 earnings and post issue equity IPO is valued at P/E of around 25. As per RHP, there is listed peers shown in above table. On BRLM's front, three BRLMs are associated with this IPO, and have handled around 23 IPO in last three fiscals. From last 10 IPOs, 1 is opened below issue price and remaining are opened above issue on the day of listing. As of now, all are trading above issue price. ( As on 24.07.21) As per financials, company has shown decline in sales, RoNW is 24.38% and P/E is around 25. In current pandemic situation, sales of company declined. All peers have shown similar trends and company is coming at discount when compared with peers. Performance of BRLM is good. So, we are giving SUBSCRIBE rating to this IPO for listing gains.
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