Rolex Rings jumps 30% on debut to close with Rs 267 gain; HNIs incur losses

HNI portion was subscribed 360x; break-even after factoring in the interest cost for wealthy investors worked out between Rs 1,400-1,500 a share versus closing price of Rs 1,167

Shares of Rolex Rings soared 30 per cent during their stock market debut on Monday. The Gujarat-based firm's stock closed at Rs 1,167, with a gain of Rs 267, or 29.6 per cent over the issue price of Rs 900. The stock touched a high of Rs 1,265 and a low of Rs 1,105.

The strong listing day performance follows Rolex Rings’ successful Rs 731-crore IPO, which was subscribed 130 times.

Despite the strong listing, market observers said, high networth individuals (HNIs) incurred loss on the transaction. The HNI portion of the IPO was subscribed 360 times. The break-even after factoring in the interest cost for wealthy investors worked out between Rs 1,400 to Rs 1,500 per share, said market players.

This is the second consecutive IPO after Glenmark Life Science (GLS), where investors have lost money. The four IPOs to list prior to GLS and Rolex had gained between 65 per cent and 113 per cent on their trading debut—boosting HNI’s risk appetite.

Rolex Rings, which has three manufacturing units in Rajkot, has raised Rs 56 crore in fresh capital through the IPO. At the last close, the company is valued at Rs 3,177 crore. For the year ended March 2021, Rolex Rings had reported a net profit of Rs 87 crore on revenues of Rs 616 crore.

The company is a manufacturer and supplier of hot rolled forged and machined bearing rings, and automotive components for two-wheelers, passenger vehicles, commercial vehicles, off-highway vehicles, electric vehicles, industrial machinery, wind turbines and railways, amongst other segments. It also supplies its products to some leading bearing manufacturing companies, tier-I suppliers to global auto companies and some auto original equipment manufacturers (OEM).