Royalarc Electrodes Ltd made its stock market debut on Monday, February 24, with its shares listing flat on the NSE SME platform. The stock opened at ₹120 per share, matching the price set during its Initial Public Offering (IPO). While the listing did not offer any immediate gains to investors, the stock managed to show slight momentum shortly after trading began. It climbed 2% to touch an intraday high of ₹122.4 per share.
In the early moments of trading, over 4.5 lakh equity shares of the company changed hands on the NSE SME platform. The stock recorded a total turnover of ₹5.41 crore within the first 15 minutes of trade. At the listing price of ₹120 per share, Royalarc Electrodes’ market capitalization was valued at ₹134.31 crore.
Investor Gains and IPO Details
At the listing price, investors who had subscribed at the upper price band of ₹120 per share would have seen no gains on their investment initially. A single lot size of the IPO comprised 1,200 shares, requiring a minimum investment of ₹1,44,000. By around 10:25 am, the stock was trading slightly higher at ₹121.25, reflecting a modest gain of 1.04%.
The IPO, which ran from February 14 to February 18, aimed to raise ₹36 crore from public investors. It included a fresh issue of 18 lakh shares worth ₹21.6 crore, alongside an Offer-For-Sale (OFS) segment comprising 12 lakh shares, amounting to ₹14.4 crore. The price band for the IPO was set between ₹114 and ₹120 per share.
Subscription and Investor Response
Royalarc Electrodes Ltd’s IPO received a moderate response from investors, with the issue being subscribed 1.67 times overall by the closing date. The retail investor portion was subscribed 2.2 times, while the Non-Institutional Investor (NII) segment saw a subscription of 1.26 times. Additionally, the Qualified Institutional Buyers (QIBs) quota was fully subscribed.
The IPO allotment status was finalized on February 19. Fedex Securities Pvt Ltd acted as the book-running lead manager for the issue, while Kfin Technologies Limited served as the registrar.
Company Overview and Business Operations
Royalarc Electrodes Ltd specializes in manufacturing welding products, including electrodes, MIG/TIG wires, and flux-cored wires. These products cater to various industrial applications, including the manufacturing of boilers, heavy structures, tanks, pipes, beams, and pressure vessels. The company’s offerings serve multiple sectors such as railways, airport infrastructure, roadways, shipbuilding, sugar industries, oil refineries, thermal power stations, and telecom sectors.
In addition to its core products, the company also deals in ancillary products like welding flux cored wires, wheels, and electro slag strip cladding materials. Its manufacturing operations are based in Zaroli, located in Umbergaon Valsad, Gujarat. Royalarc Electrode’s products are sold both in domestic markets and exported to over 20 countries worldwide.
Utilization of IPO Proceeds
The company has outlined a clear plan for utilizing the funds raised from its IPO. Approximately ₹4.88 crore will be allocated to expand its existing manufacturing facility in Gujarat. Additionally, ₹14 crore will be directed toward meeting its working capital requirements, with the remaining funds set aside for general corporate purposes.
Financial Performance
In terms of financial performance, Royalarc Electrodes Ltd reported a profit after tax (PAT) of ₹3.17 crore for the first half of the financial year 2024–25 (April to September). During the same period, its revenue from operations stood at ₹45.6 crore.
For the full financial year ending March 31, 2024, the company recorded revenue of ₹99.78 crore, showing an increase compared to ₹96.94 crore in the previous financial year (FY23). Its net profit for FY24 rose to ₹11.92 crore, up from ₹9.56 crore in FY23, reflecting steady growth in both revenue and profitability.
Overall, Royalarc Electrodes Ltd made a modest debut on the NSE SME platform, with a flat listing that saw mild gains shortly after trading began. Despite the lack of immediate listing-day profits for initial investors, the company’s solid financial performance and clear growth plans suggest a focus on expansion and operational scaling in the coming years.