Royal Arc Electrodes Ltd IPO: Comprehensive Details for Investors

Royal Arc Electrodes Ltd, a prominent player in the welding consumables industry, has announced its Initial Public Offering (IPO). This article provides an in-depth look into the company’s background, IPO specifics, financial health, strengths, potential risks, and other pertinent details to assist investors in making informed decisions.

Company Overview

Established in 1996, Royal Arc Electrodes Ltd specializes in manufacturing and supplying a diverse range of welding consumables, including welding electrodes, flux-cored wires, and MIG/TIG wires. These products cater to various industries such as railways, refineries, shipyards, and infrastructure projects. The company’s state-of-the-art manufacturing facility, located in Zaroli, Umbergaon Valsad, Gujarat, spans approximately 25,082.61 square meters. With a strong commitment to quality, Royal Arc holds ISO 9001:2015 certification and exports its products to over 20 countries worldwide.

IPO Timeline and Details

The Royal Arc Electrodes IPO is scheduled to open on February 14, 2025, and will close on February 18, 2025. The company aims to raise ₹36.00 crore through this IPO, offering a total of 30,00,000 equity shares. The price band is set between ₹114 to ₹120 per share, with a lot size of 1,200 shares, requiring a minimum investment of ₹1,36,800. The shares are proposed to be listed on the NSE SME exchange.

Key Dates

Event	Date
IPO Opening Date	February 14, 2025
IPO Closing Date	February 18, 2025
Basis of Allotment Finalization	February 19, 2025
Refunds Initiation	February 20, 2025
Credit of Shares to Demat Accounts	February 20, 2025
Listing Date	February 21, 2025

Financial Highlights

Over the past three fiscal years, Royal Arc Electrodes Ltd has demonstrated consistent financial growth:

Fiscal Year Ending	Revenue (₹ in Lakhs)	Profit After Tax (₹ in Lakhs)
March 31, 2022	6,290.97	212.13
March 31, 2023	9,694.02	956.82
March 31, 2024	9,978.75	1,192.63

This upward trajectory indicates the company’s robust market position and operational efficiency.

Strengths

• Diverse Product Portfolio: Offers a wide range of welding consumables catering to multiple industries.
• Global Presence: Exports products to over 20 countries, showcasing international market acceptance.
• Quality Certifications: Holds certifications from esteemed bodies like ABS, IBR, and BIS, ensuring adherence to international standards.
• Experienced Leadership: Managed by professionals with over 30 years of experience in the welding industry.

Risks

• Market Dependency: Reliance on specific industries may pose risks if those sectors experience downturns.
• Single Manufacturing Facility: Operations are concentrated in one location, which could be a vulnerability in case of regional disruptions.
• Workforce Size: With a relatively small team of 144 employees, scaling operations rapidly might present challenges.

IPO Anchor Investors Details

As of now, specific details regarding anchor investors have not been disclosed. Investors are advised to monitor official communications from the company for updates in this regard.

IPO Promoter Holding

Promoter Name	Shares Offered for Sale
Hardik Sanghvi	3,33,000
Swagat Sanghvi	3,33,000
Bipin Sanghvi	1,71,000
Tarulata Sanghvi	1,23,000
Pooja Sanghvi	1,20,000
Ami Sanghvi	1,20,000

Note: The above table reflects the shares offered for sale by each promoter as part of the Offer for Sale (OFS) component of the IPO.

IPO Grey Market Premium (GMP)

As of February 15, 2025, there is no active Grey Market Premium (GMP) for the Royal Arc Electrodes IPO. Investors should note that GMP is speculative and can fluctuate; it does not guarantee the listing performance of the stock.

Final Thoughts

Royal Arc Electrodes Ltd presents a compelling opportunity for investors, backed by a strong financial track record, diverse product offerings, and a significant global footprint. However, potential investors should carefully consider the associated risks, including market dependency and operational concentration. Conducting thorough due diligence and consulting with financial advisors is recommended before making investment decisions.