IPO Launch Date, Evaluation, Pricing, and Allocation Particulars of Racks & Rollers

The IPO details for Racks & Rollers are confirmed: The IPO is scheduled to open on April 30 and close on May 3. Racks & Rollers, a BSE SME IPO, aims to raise ₹29.95 crores through the IPO. The price band for the Racks & Rollers IPO is set at ₹73 to ₹78 per share, with a market lot of 1600 shares.

Racks and Rollers, a division of Storage Technologies & Automation, was established in 2010 with a focus on providing storage racking systems. They specialize in designing, manufacturing, and installing metal storage racks, automated warehouses, and other storage solutions. Their product range reflects their dedication to offering innovative and efficient solutions tailored to the diverse warehousing needs of various industries, including oil & gas, automotive components & aerospace, food & beverages, cold storage, pharmaceuticals, textiles, retail, FMCG, and more.

As a customer-centric company, Racks and Rollers prioritize continuous innovation and operational efficiency. They offer a wide range of display and storage racks for commercial and industrial purposes, all manufactured using high-quality raw materials to ensure durability and strength. Their raw materials include different grades of mild steel (hot rolled coils, cold rolled coils, galvanized steel coils, PPGI coils, pipes, and structural sections), as well as materials for powder coating such as epoxy, enamel paints, and plastic for packaging.

Being ISO 9001:2015 certified underscores their commitment to quality. Their extensive infrastructure, spanning approximately 56,250 square feet in Singanayakanahalli, Yelahanka Hobli, Bangalore-560064, Karnataka, along with a storage facility of around 20,000 square feet, supports their streamlined manufacturing process. They manage product design, manufacturing, quality control, packaging, storage, and delivery processes across various specialized segments of their infrastructure, with strict monitoring by their experienced team of quality controllers.

Racks & Rollers IPO Details

IPO Date April 30, 2024 to May 3, 2024
Listing Date [.]
Face Value ₹10 per share
Price Band ₹73 to ₹78 per share
Lot Size 1600 Shares
Total Issue Size 3,840,000 shares (aggregating up to ₹29.95 Cr)
Fresh Issue 3,840,000 shares (aggregating up to ₹29.95 Cr)
Issue Type Book Built Issue IPO
Listing At BSE SME
Share holding pre issue 9,000,000
Share holding post issue 12,840,000
Market Maker portion 200,000 shares

Racks & Rollers IPO Timeline (Tentative Schedule)

IPO Open Date Tuesday, April 30, 2024
IPO Close Date Friday, May 3, 2024
Basis of Allotment Monday, May 6, 2024
Initiation of Refunds Tuesday, May 7, 2024
Credit of Shares to Demat Tuesday, May 7, 2024
Listing Date Wednesday, May 8, 2024
Cut-off time for UPI mandate confirmation 5 PM on May 3, 2024

Key Performance Indicator

KPI Values
ROE 46.37%
ROCE 22.52%
RoNW 37.64%
PAT Margin (%) 6.78%

Objects of the Issue (Racks & Rollers IPO Objectives)

The company intend to utilize the proceeds of the Issue to meet the following objects: –

  1. To meet Working Capital requirements
  2. General Corporate Purpose

Racks & Rollers IPO Review (May apply)

The company operates in a fiercely competitive and fragmented market, with fluctuations in its bottom lines observed from FY21 to FY23. Although it reported significant profits for the first seven months of FY24, there are concerns that these profits may be a result of window dressing to inflate the valuation of the IPO. While the valuation based on super annualized earnings for FY24 suggests that the issue is fully priced, considering FY23 earnings, it appears exorbitantly priced.

As of April 1, 2024, the company’s order book stood at Rs. 21+ crores, indicating a promising outlook. However, it’s important to exercise caution and conduct thorough due diligence before investing, especially for well-informed or cash-surplus investors who may consider parking funds for the medium term.

Racks & Rollers Limited Financial Information (Restated Standalone)

Rack & Rollers Ltd’s revenue increased by 16.42% and profit after tax (PAT) rose by 335.72% between the financial year ending with March 31, 2023 and March 31, 2022.

Period Ended 31 Oct 2023 31 Mar 2023 31 Mar 2022 31 Mar 2021
Assets 6,375.77 4,004.01 3,567.70 3,113.04
Revenue 5,317.09 8,137.12 6,989.72 4,852.38
Profit After Tax 358.91 48.30 -20.49 118.42
Net Worth 953.52 594.61 546.31 566.81
Reserves and Surplus 653.52 294.61 246.31 466.81
Total Borrowing 1,632.53 931.63 871.10 347.48
Amount in ₹ Lakhs

Racks & Rollers Company Financial Report

₹ in Crores
Year Revenue Expense PAT
2021 ₹48.52 ₹46.65 ₹1.18
2022 ₹69.90 ₹69.91 ₹0.20
2023 ₹81.37 ₹80.58 ₹0.48
October 2023 ₹53.17 ₹48.32 ₹3.59

Company Promoters

  • Mr. Mohammad Arif Abdul Gaffar Dor
  • Mr. Hanif A Khatri
  • Mr. Syed Azeem
  • Mr. Afzal Hussain
  • Mr. Nuumaan Khasim