Rajputana Stainless IPO: DRHP Filed with SEBI for ₹10 Face Value; Offer Includes Fresh Issue & OFS

Stainless steel manufacturer Rajputana Stainless Limited has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to launch an initial public offering (IPO) comprising a fresh issue of equity shares and an offer for sale (OFS).

IPO Structure: Fresh Issue and Offer for Sale (OFS)

Rajputana Stainless Limited IPO consists of

• Total public offer: 2.09 crore equity shares
• Fresh issue: 1.46 crore shares
• Offer for Sale (OFS): 62.5 lakh shares
• OFS by: Promoter Shankarlal Deepchand Mehta

Rajputana Stainless Limited IPO Snapshot

About Rajputana Stainless Limited

Incorporated in 1991 and rebranded in 2007, Rajputana Stainless is engaged in the manufacturing of long and flat stainless-steel products under the brand name “RSL”. The company offers over 80 grades of stainless steel catering to industries such as forging, seamless pipes, utensils, automotive, and wire manufacturing.

Operating under a pure B2B model, Rajputana has its manufacturing unit in Kalol, Gujarat, and is planning to expand operations by setting up a stainless-steel seamless pipes facility at the same location.

Expansion Plan and Use of IPO Proceeds

The company proposes to utilize the net proceeds from the fresh issue towards:

• ₹183.15 crore for capex to set up the new stainless steel seamless pipe facility
• ₹980 crore for repayment/prepayment of existing secured borrowings
• The remaining for general corporate purposes.

Financial Highlights (Restated)

Promoter Details and Shareholding Pattern

The promoter group, including Shankarlal Deepchand Mehta, Babulal D. Mehta, and Jayesh Natvarlal Pithva, currently holds over 70% stake in the company. Post-IPO holding will be diluted accordingly.

The offer for sale component is solely from Shankarlal Mehta, who plans to offload up to 62.5 lakh shares. The weighted average acquisition cost for the selling promoter stands at ₹0.91 per share.

Key Risk and Business Factors (As Disclosed in DRHP)

• The company derives a significant portion of its revenue from its top 10 customers, which accounted for 43.75% of total operating revenue during the nine-month period ended December 31, 2024. The company has noted that it does not have long-term contracts with all of these customers.
• A substantial portion of the company’s domestic sales is concentrated in the states of Maharashtra, Gujarat, and Uttar Pradesh, contributing over 91% of total revenue from operations during the reporting period.
• The company operates in a high-volume, low-margin business, where profitability is sensitive to fluctuations in turnover and raw material prices.
• As of December 31, 2024, the company has disclosed contingent liabilities amounting to approximately ₹110.36 crore, including dues under central excise, GST, VAT, income tax, and other statutes. Additionally, the company and its promoters are involved in certain ongoing legal proceedings.

The company awaits SEBI approval and will finalise the IPO price band, lot size, and dates in due course. The equity shares are proposed to be listed on BSE and NSE.

REF: https://www.bseindia.com/corporates/download/364486/IPO Prior/1BSEDRHPFinalUpload_20250619214550.pdf

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