Deem Roll Tech IPO (NSE SME) Overview

Deem Roll Tech Limited is one of the leading manufacturers of steel and alloy rolls in India, which constitute the building blocks of the iron and steel rolling mill industry. Deem Roll Tech IPO aims to raise Rs 29.26 crores. The issue is entirely a fresh issue of 22.68 lakh shares.

IPO opensFeb 20, 2024
IPO ClosesFeb 22, 2024
IPO Size (Rs.)₹29.26 Cr
IPO Size (s hares)2,268,000 shares
BreakupFresh issue only
Face Value:₹ 10
IPO Price in Rs :₹129 per share
Minimum Lot1000 Shares
Listing AtNSE SME
NII Quota~50%
Retail Quota~50%
 Lead ManagerFedex Securities Pvt Ltd
RegistrarBigshare Services Pvt Ltd
Market makerSs Corporate Securities

About Deem Roll Tech Limited:

  • Deem Roll Tech Ltd. is India’s leading roll maker.
  • They have three completely integrated facilities including machine shops, foundries, and heat treatment plants since 2003.
  • The first factory is 4000 sq. m. in GIDC, Chhatral. Kalol, Gandhinagar
  • The second factory is 20000 sq. m. in Ganeshpura village, Mehsana.
  • Third factory is 12000 sq. m. in Hooghly, outside Kolkata.
  • They are India’s largest roll maker at 8000 tonnes per year.
  • They supply the Rolls directly to rolling mill manufacturers (“OEMs”) and in the replacement market to the iron and steel rolling mills through a network of dealers / distributors and agents.
  • Presently, they use static cast and centrifugally cast technology for the manufacturing of Rolls.
  • The promoters of the company are Jyoti Prasad Bhattacharya and Dev Jyotiprasad Bhattacharya.

Financials: Deem Roll Tech Limited

Particulars (₹ in cr.)2023 (06)2023 (12)2022 (12)2021 (12)
Revenue5,007.7810,337.139,170.456,379.49
Profit after Tax371.83692.05409.78298.24
Share Capital583.73138.32138.32138.32
Net-worth3,780.023,408.192,716.162,306.35
Earnings per share6.3711.867.025.11
Net Asset Value64.7658.3946.5339.51
Total borrowings2,062.472,080.881,636.651,802.25
Post issue Share Capital834   
FV10.0   
IPO price129.0   
EPS Fy238.3   
PE Fy2315.5   
EPS Fy24 (annualized)8.9   
PE Fy24  (annualized)14.5   
Market cap in cr10,758.6   
Market cap / Sales1.04   

Deem Roll Tech IPO: Salient Points

  • Rolls are tailor-made as per the mill requirement of the customers. Since a major quantity of the cast Rolls and forged Rolls are produced for use in the rolling mills of the steel industry, hence the Roll industry is closely related to the steel industry.
  • The growth in the steel industry offers good potential for Rolls manufacturers. With both automobile and infrastructure sectors showing healthy growth rate, there will be a demand-push effect for both flat product and long product rolls. Demand for high-quality, high- performance cast rolls, which are indispensable to the rolling of high-grade steel sheets or strips, is expected to undergo significant growth. Accordingly, the demand for Rolls will be directly related to capex plans of the iron and steel industry and also the demand for steel.
  • They manufacture the products from steel scrap, roll scrap, pig iron, nickel, ferro molybdenum, other ferro alloys, resin coated sand, etc conforming to international standards
  • Company intends to utilize the Net Proceeds the net proceeds of the IPO funds for:
    • Funding capital expenditure towards expansion of existing manufacturing facility at PGaneshpura, Mehsana, Gujarat, India (“Manufacturing Unit 2”);
    • Funding our Working Capital Requirements; and
    • General Corporate Purpose
  • Deem Roll Tech is one of the leading manufacturers of steel and alloy Rolls in India having integrated steel plants and enjoying a strong brand identity and recall amongst end customers.
  • The Rolls manufactured by the Company finds its application in the iron and steel rolling mill industries in the domestic and international markets.
  • Company exports its products to over 10 countries, such as USA, Germany, Europe, Middle East, Oman, Saudi Arabia, South Africa, Nepal and Bangladesh, Japan, Ukraine, Ghana, Brazil, Egypt, Greece.
  • During the six months period ended as on September 30, 2023 and the Fiscals 2023, 2022 and 2021, revenue from export of products accounted for ₹ 860.74 lakhs, ₹ 2067.69 lakhs, ₹ 1,550.50 lakhs and ₹ 1056.27 lakhs resulting into 17.19 %, 20.00%, 16.91% and 16.56% of our total revenue, for such periods respectively.
  • Revenues from exports have grown at a CAGR of 39.91% between Fiscals 2021 and 2023.
  • The outstanding order books as on March 31, 2023 is in table below:
      Product Name   customersTotal Order Value (₹ in lakhs)Sum of Order Value executed till March 31,2023 (₹ in lakhs)  Sum of Outstanding order Value (₹ in lakhs)
Adamite Rolls381167.56258.95908.63
Double Pour Indefinite Chilled Rolls8219.4432.79186.64
Forged Steel Rolls380.484.2476.24
HSS Rolls290.2490.24
Indefinite Chilled Rolls386.2833.7852.51
Spheodial Graphite Iron Rolls555210.191055.184155.00
Grand Total1096854.191384.945469.26
  • Chanakya Opportunities Fund I made a Pe-IPO investment in the company.
  • As of March 31, 2023, they operate three strategically located manufacturing facilities across two states in India i.e. Gujarat and West Bengal. The facilities are located in proximity to customers, allowing them to save on transportation cost and delivery period.
  • Deem Roll Tech IPO is coming at a PE ratio of 15.5x(fy23 earnings) and 14.5x (fy24 annualized earnings)
  • I intend to apply in Deem Roll Tech IPO subject to availability of funds. Sector has good prospects as its prospects are closely linked to steel industry which is expected to do well.
  • GMP as reported on social media has been Rs. 46.
  • Fedex Securities Pvt Ltd is the Lead Manager with a mixed record wrt listing gains. Past issues handled by them include Polysil Irrigation Systems, Baweja Studios, IBL Finance Limited, Docmode Health Technologies, Committed Cargo Care Limited, Sharp Chucks And Machines Limited, KK Shah Hospitals Limited, Oneclick Logistics India Limited, Kundan Edifice Limited, Pramara Promotions Limited, Yasons Chemex Care Limited, Pattech Fitwell Tube Components Limited, Lead Reclaim and Rubber Products Limited, Tapi Fruit Processing Ltd, Virtuoso Optoelectronics Limited, Kesar India Limited
  • SME IPO are much more risky and volatile than mainboard IPOs.
  • Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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