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Refractory Shapes Limited IPO Review: Refractory Shapes Limited has issued 60,00,000 shares for INR 18.60 crore. The company intends to expand its manufacturing unit, pay off debts, acquire equipment and vehicles, and cover general expenses.
Refractory Shapes Limited IPO – Important Dates
| Refractory Shapes IPO Date | May 6, 2024 to May 9, 2024 |
| Refractory Shapes IPO Listing Date | May 14, 2024 |
| Refractory Shapes IPO Price | INR 27-31 per share |
| Refractory Shapes IPO Lot Size | 4000 shares |
| Refractory Shapes IPO Total Issue Size | INR 18.60 crores |
| Refractory Shapes IPO Basis of Allotment | May 10, 2024 |
| Refractory Shapes IPO Initiation of Refunds | May 13, 2024 |
| Refractory Shapes IPO Credit of Shares to Demat | May 13, 2024 |
| Refractory Shapes IPO Issue Type | Book Built Issue IPO |
| Refractory Shapes IPO Listing At | NSE SME |
Refractory Shapes Limited IPO – Company Profile
Refractory Shapes Limited has been providing the refinery and steel industries since 1973. Since 2007, it has been an approved vendor with EIL, an OEM in EIL projects, and an enabler of opportunities in greenfield projects. It has revalidated its enlistment every three years. The managing director of the company is Ms. Prajna Shravan Shetty.
Steel, refineries, and petrochemicals are among the industries that benefit from the company’s bespoke goods. They are designed for long-term use and increase operating efficiency. Modern equipment enables scalable manufacturing, increasing product diversity and market reach.
Refractory Shapes trades for commodities such as Metallic Anchors purchased from licensed vendors to supplement its production activities. It also sends finished items to vendors to fulfill customer delivery deadlines, increasing operational flexibility.
Refractory Shapes Limited IPO Financials
Refractory Shapes Technologies’ financial analysis shows a mixed performance. Revenue rose initially but then fell, while equity and assets increased. However, the rising debt-equity ratio, dropping EPS, RoNW, and current ratio are all cause for concern among potential IPO investors.
- Revenue Trend: The revenue rose from ₹2,550.32 lakhs in March 2022 to ₹3,796.92 lakhs in March 2023. The revenue for the current year’s nine-month period ending December 2023 is INR 2,942.15 lakhs, which falls short of the previous year’s benchmark.
- Equity and Liabilities: Equity has consistently increased over time, indicating potential growth and expansion. However, the debt-equity ratio has risen, reflecting a stronger reliance on debt financing.
- Profitability: The profit after tax (PAT) has increased from ₹287.04 lakhs in March 2022 to ₹307.94 lakhs in December 2023. This increase in profitability could boost investor confidence.
- Earnings per Share (EPS): The diluted EPS increased from ₹1.82 in March 2022 to ₹0.97 in December 2023, indicating reduced earnings per share for investors.
- Return on Net Worth (RoNW): The RoNW has increased from 19.44% to 15.58%, showing a decline in the company’s ability to earn returns on shareholder equity.
- Financial Position: Total assets have increased, indicating future business growth. However, the current ratio has fallen, indicating declining liquidity and likely difficulties in satisfying short-term obligations.
Refractory Shapes Limited IPO Fundamental Analysis
| Particular | As of 31 March 2022 | As of 31 March 2023 | As of 31 December 2023 |
| Revenue (₹ in lakhs) | 2,550.32 | 3,796.92 | 2,942.15 |
| Equity (₹ in lakhs) | 1,476.90 | 1,668.64 | 1,976.58 |
| Expenses (₹ in lakhs) | 2,283.63 | 3,623.49 | 2,598.03 |
| Profit and Loss After Tax (₹ in lakhs) | 287.04 | 191.74 | 307.94 |
| Diluted EPS only (₹) | 1.82 | 1.21 | 0.97 |
| Return on Net Worth (%) | 19.44 | 11.49 | 15.58 |
| NAV per Equity Share (₹) | 9.35 | 10.56 | 6.26 |
| Total Assets (in lakhs) | 3,684.82 | 5,003.81 | 5,289.90 |
| Total Liabilities (in lakhs) | 2,207.92 | 3,335.17 | 3,313.32 |
| Debt-Equity Ratio | 1.06 | 1.23 | 1.18 |
| Current Ratio | 1.53 | 1.02 | 1.25 |
Refractory Shapes Limited IPO Peer Comparison
Refractory Shapes Limited maintains consistent revenue and profit margins, demonstrating durability. SP Refractories Limited leads in both revenue and margins. IFGL Refractories Limited outperforms in all criteria, suggesting a strong competitive position.
| Company | Face Value (₹) | P/E (₹) | EPS (Basic & Diluted) (₹) | RoNW (%) | NAV per Equity Share (Basic) (₹) |
| Refractory Shapes Limited | 10 | NA | 1.21 | 11.49 | 10.56 |
| S P Refractories Limited | 10 | 17.45 | 6.56 | 7.13 | 49.97 |
| IFGL Refractories Limited | 10 | 31.91 | 16.97 | 10.12 | 172.67 |
Refractory Shapes Limited IPO Objective
The primary goal of Refractory Shapes Limited is to fund capital expenditures, settle debts, and purchase commercial vehicles.
- Funding of Capital expenditure towards civil construction required for Expansion of existing manufacturing unit at the existing location situated at Wankaner, Gujarat: According to cost estimates, the firm expects to invest INR 429.78 lakhs in expanding its manufacturing unit in Wankaner, Gujarat, which will include civil construction for the floor, walls, roofing, and electrical.
- Funding of Capital expenditure towards the purchase of Plant and Machineries for Expanding and setting up a new manufacturing unit at the existing location situated at Wankaner, Gujarat: The company intends to spend INR 250.98 lakhs on equipment and machinery in order to improve operational efficiency, fulfill rising demand, and improve overall performance across a variety of industries.
- Repayment/prepayment of all or certain company borrowings: The company intends to repay/prepay borrowings in the amount of INR 700.00 lakhs, with the goal of reducing outstanding debt, lowering debt servicing costs, and improving its debt-to-equity ratio for future growth.
- Purchase of Commercial Vehicle: The company intends to invest INR 11.00 lakhs on a commercial truck, with the goal of increasing logistics efficiency by bringing items directly to clients and minimizing dependency on third-party logistics.
- General Corporate Purposes: The corporation will allocate funds towards general corporate goals, which include covering operating expenses and project development, as well as strengthening business development and marketing capabilities to ensure readiness to face challenges.
Refractory Shapes Limited IPO Risks And Challenges
Legal actions, a lack of EIL recognition that harms brand reputation, and reliance on unpredictable raw material costs that affect expenses, profitability, and operational stability are among the dangers facing Refractory Shapes Limited.
- Outstanding legal processes involving the Company, Promoters, Directors, and Group Companies present hazards. Adverse judgments may have a substantial influence on corporate operations, financial conditions, and results.
- The company’s EIL accreditation ensures that it meets high production requirements. Lack of recognition can impair a brand’s reputation and have a negative impact on business operations, profitability, financial health, and cash flow.
- The company relies on local suppliers for raw materials, particularly alumina, which is essential for manufacturing its product assortment. Raw material costs have a considerable impact on expenses and profitability, and they are volatile and prone to supply difficulties.
Refractory Shapes Limited IPO – Industry & Market Potential
India’s manufacturing sector, a major driver of economic growth, is expected to account for 25% of GDP by 2025. With technological and infrastructure developments, India aspires to become a global manufacturing hub, capitalizing on its talented workforce and industrial experience.
India’s manufacturing exports reached a record of US$ 447.46 billion in FY23, representing a 6.03% increase. With a growing middle class and booming GDP, India hopes to make a big contribution to the global economy by 2030.
India’s industrial industry draws international investment and has the potential to generate $1 trillion by 2025. Initiatives such as GST implementation and SAMARTH Udyog Bharat 4.0 seek to boost competitiveness and promote industrial development.
Refractory Shapes Limited IPO Allotment Structure
According to SEBI regulations, Refractory Shapes will be allocated as follows: 50% to Qualified Institutional Buyers (QIB), 35% to Non-Institutional Investors (NII), and 15% to Retail Individual Investors (RII). Market makers are allocated 3,04,000 shares.
● Qualified Institutional Buyers (QIB): According to SEBI norms, 50% of the shares offered in the IPO would be reserved for Qualified Institutional Buyers. These include banks, mutual funds, and insurance businesses.
● Non-Institutional Investors (NII): 35% of the shares will be reserved for non-institutional investors. These often include corporate entities or individuals who invest more than Rs.2 lakhs.
● Retail Individual Investors (RII): The remaining 15% of the shares will be allocated to retail individual investors. These individual investors apply for shares worth less than Rs. 2 lakhs.
● Market Maker Reservation: A part of the shares, specifically 3,04,000 shares, are allocated for market makers.
Refractory Shapes Limited IPO GMP
| IPO OPEN TO CLOSE DATE | IPO PRICE | LATEST GMP | ESTIMATED LISTING GAIN |
| 6 May to 9 May 2024 | 31 | 13 | 44 (41.94%) |
View Live GMP of All IPOs – Live GMP
Note: The information associated with the IPO is for educational purposes only. Consider with your financial advisor before investing in an IPO.
