Rolex Rings’ IPO will open on July 28: Know how the company’s 2007 expansion plan supports its growth story

Rajkot-based Rolex Rings' initial public offering (IPO) will open on July 28 and close on July 30. The IPO will be available at the price band of Rs 880-900 per share. The company plans to raise around Rs 730 crore through the IPO.

Meanwhile, the company is looking at healthy growth in the next three-four years. This is mainly because of the timely expansion that the company undertook in 2007, the company’s top management stated.

During that expansion, the company had invested around Rs 400-500 crore by raising funds from various sources. Now, the company hopes to pay off the debt it raised during this expansion. Today, the company has three manufacturing units in Rajkot.

“The company will be debt-free in this fiscal. Major debts have been paid off and the remaining are small amounts that will be paid in coming quarters,” stated Hiren Doshi, Chief Financial Officer, Rolex Rings.

One of the investors during the debt raising in 2007 was Rivendell PE LLC. In the upcoming initial public offering (IPO) of the company, Rivendell PE LLC is the selling shareholder with an offer for sale of up to 75 lakh equity shares and a fresh issue is worth Rs 56 crore.

Commenting on the expansion plan, the company promoter and managing director Manesh D Madeka, said, “We do not have any expansion plan for the next three-four years. We have only utilised 60 per cent in forging. Thus, we have sufficient capacity available there.”

Manesh Madeka added that in the short term, there is no major expansion plan in the pipeline. However, it may have to invest around Rs 50 crore to upgrade its facilities. “In the next two to three years, we will continue our growth (story) due to our existing projects.” However, the company has plans to expand in cold forging in 2025 after the utilisation of its existing capacities.

More than three decades old automotive components manufacturer has around 20 forging lines with a combined installed capacity of 1,44,750 MTPA, machining facilities consisting of around 500 spindles with a combined installed capacity of 66 million parts per annum and other machinery including heat treatment furnaces, cold rolling machines and other infrastructure.

The company manufactures hot rolled forged and machined bearing rings; automotive components for vehicles; industrial machinery; wind turbines, railways etc. It is a global supplier and 70 per cent of revenues come from exports.

The company is looking at adding new clients from Europe and the United States. At present, it has over 70 clients across the world. Most of these clients have been associated with the company for over decades, stated Mihir Madeka, director of the company.

The company was founded in 1988 with an initial investment of Rs 7,000 by four Madeka brothers, stated Manesh Madeka. Today, the total income of the company is Rs 675.33 crore in fiscal 2020 and is growing at a CAGR of 8-9 per cent in the last three years.