Rishabh Instruments makes tepid debut, lists 4% higher over issue price

The stock listed at Rs 460 as against its issue price of Rs 441 per share. Later, it fell below its issue price to hit an intraday low of Rs 432.25 on the BSE

Rishabh Instruments made a lackluster debut on the BSE and on the National Stock Exchange (NSE) on Monday, with the shares of the company getting listed at Rs 460, a 4 per cent premium over its issue price of Rs 441 per share.

Post listing, the stock fell below its issue price to Rs 432.25 on the BSE and to Rs 432.35 on the NSE. At 10:05 AM, Rishabh Instruments was quoting at Rs 462.80, 1 per cent higher over its issue price. A combined 3.9 million equity shares have thud far changed hands on the NSE and BSE.

The company is a global leader in the field of energy efficiency solutions, with a primary focus on electrical automation, metering, and precisionengineered products. Their product offerings have a wide range of applications across industries, including power, automotive, and various industrial sectors.

The IPO had received good response with the issue getting subscribed 31.65 times. The retail investors' portion of the issue got subscribed 8.44 times, qualified institutional buyers (QIB) category got subscribed 72.54 times, and non institutional investor (NII) category got subscribed 31.29 times.

Their customer base spans a wide range of industrial sectors, including power generation and distribution, OEM industries, and emerging applications. The company attributes its continued success to a steadfast commitment to innovation, supported by the presence of robust research and development centers in India, Poland, and China.

However the company faces certain risks from situations like shortages in the supply of semiconductors may have an adverse effect on the operations. The company has to undertake continuous technological upgradation and R&D activities. The company products are also subject to a lot of foreign approvals some of which maybe time consuming, analysts said.

"Rishabh Instruments doesn’t have any listed peers in India. Taking into consideration weak cash flows and low return ratios, the valuations are slightly stretched. However, being a unique business, the business may command a scarcity premium and long-term investors are recommended to subscribe to the issue. Listing gains are likely to remain tepid," analysts at SBI Securities had said in IPO note.