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Rishabh Instruments Limited, a global energy efficiency solution company focused on electrical automation, metering and measurement, precision engineered products with diverse applications across industries including power, automotive and industrial sectors has filed its Draft Red Herring Prospectus (DRHP) with the markets regulator, Securities and Exchange Board of India (SEBI), to raise funds through an initial public offering (IPO).

The public issue with a face value of Rs 10 per equity share consists of a fresh issue of equity shares worth up to Rs 75 crore and an offer-for-sale (OFS) of up to 9,417,500 equity shares by Promoter and selling shareholders, which comprises up to 25,00,000 equity shares by Asha Narendra Goliya, up to 4,00,000 equity shares by Rishabh Narendra Goliya, up to 5,17,500 equity shares by Narendra Rishabh Goliya (HUF) and up to 60,00,000 equity shares by SACEF Holdings II.

In September 2013, South Asia Clean Energy Fund, an India focused clean energy private equity fund, through its subsidiary, SACEF, acquired 19.90% stake in Rishabh Instruments on a fully diluted basis.

The Offer is being made through the Book Building Process, wherein not more than 50% of the Offer shall be available for allocation to Qualified Institutional Buyers, not less than 15% of the Offer shall be available for allocation to Non-Institutional Investors and not less than 35% of the Offer shall be available for allocation to Retail Individual Investors.

The company, in consultation with the lead bankers to the issue, may consider a Pre-IPO placement of Rs 15 crore. If such placement is completed, the issue size will be reduced accordingly.

The proceeds from the fresh issuance worth Rs 59.50 crores will be used towards financing the cost towards the expansion of Nashik Manufacturing Facility and general corporate purposes.

With over four decades of experience in the manufacturing and electrical industry, Narendra Joharimal Goliya founded Rishabh Instruments in the year 1982. The company supplies a wide range of electrical measurement and process optimization equipment and engages in the design, development, manufacturing, and sale of devices—significantly under its own brand—across a number of industries.

It is a vertically integrated player involved in designing, developing, manufacturing and supplying electrical automation devices; metering, control and protection devices; portable test and measuring instruments; and solar string inverters. Additionally, through its subsidiary, Lumel Alucast, it manufactures and supplies high pressure die cast aluminium.

According to the F&S report mentioned in the DRHP, the Company is a global leader in the manufacture and supply of analog panel meters and is also one of the leading global manufacturers and suppliers of low voltage current transformers. For meters, controllers, and recorders, Lumel is the most popular brand in Poland, and Lumel Alucast is one of the leading non-ferrous pressure casting players in Europe.

It primarily follows a business-to-business model which is purchase order based for all its segments except portable test and measuring instruments which is also sold on a merchant basis. It has an extensive network of 167 authorized distributors/stockists across 81 districts in India with direct sales conducted through eight sales and marketing offices which collectively house 53 engineers and 23 sales personnel.

The Electrical automation products include energy management software, transducers and isolators, paperless recorders (chartless) and dataloggers, temperature and humidity recorders, I/O converters and temperature controllers among others. Its product portfolio consists of over 145 product lines and 0.13 million stock keeping units as of October 31, 2022 and served customers in over 100 countries.

It manufactures all its products in-house from its five manufacturing facilities – two in India, two in Poland and one in China. Products manufactured at Poland’s manufacturing facility are tested and certified by testing laboratories for certifications such as CE, ROHS, UKCA besides others. The company has total installed manufacturing capacity of 22.2 Mio products per annum.

The global provider of energy efficiency solutions deals with domestic and international competition in all market areas in India. Masibus Automation and Instrumentation Private Limited and Selec Controls Private Limited are its competitors in the field of electrical automation. Schneider Electric India Private Limited, Elmeasure India Private Limited, and Selec Controls Private Limited are some of its competitors in metering, control, and protection devices. Hioki India Private Limited and Meco Instruments are competitors in portable test and measuring instruments. Shenzhen Growatt New Energy Co. Ltd. competes internationally in the market for solar string inverters. Sunbeam Lightweighting Solutions Private Limited and Endurance Technologies Limited are competitors for its high pressure die casting aluminium products in India.

Rishabh Instruments’ revenue from operations increased by 20.59% from Rs 389.96 crore in Fiscal 2021 to Rs 470.25 crore in Fiscal 2022, primarily driven by increase in revenue from sale of goods and from sale of services, whereas profit after tax grew 38.15% to Rs 49.65 crore in Fiscal 2022, as compared to Rs 35.94 crore in Fiscal 2021.

For the six months ended September 30, 2022 revenue from operations stood at Rs 261.14 crore and profit after tax stood at Rs 16.83 crore.

The global electrical automation market is valued at USD 139.1 billion (Rs 11.51 trillion) in 2021 and is expected to reach USD 203.6 billion (Rs 16.85 trillion) by 2026, whereas the Indian Electrical Automation market was valued at USD 5975.6 million (Rs 49,448.09 crore) in 2021 and is forecasted to grow at a CAGR of 8.6% to reach USD 9024.6 million (Rs 74,678.57 crore) by 2026 after experiencing a slowdown in 2020 due to the COVID-19 pandemic, but it has bounced back strongly and showcases a strong and positive outlook.

DAM Capital Advisors Limited, Mirae Asset Capital Markets (India) Private Limited and Motilal Oswal Investment Advisors Limited are the book-running lead managers and KFin Technologies Limited is the registrar to the issue.