Rashi Peripherals IPO Review

Rashi Peripherals IPO envisages to raise Rs 600.00 crores. The issue is entirely a fresh issue of 1.93 crore shares.   Rashi Peripherals is one of the leading ICT product distributor in India. Rashi Peripherals is the fourth largest player in the distribution business of ICT products and services in India.

IPO opensFeb 07, 2024
IPO ClosesFeb 09, 2024
IPO Size (Rs.)₹600.00 Cr
IPO Size (shares)19,292,604 shares
BreakupFresh issue ₹462.00 Cr + OFS ₹108.00 Cr
Face Value:₹5 per share
IPO Price in Rs.₹295 to ₹311 per share
Minimum Lot48 Shares
Listing AtNSE , BSE
QIB ~50 %
NII Quota~15
Retail Quota~35%
 Lead ManagerJm Financial and ICICI Securities
RegistrarLink Intime

About Rashi Peripherals:

  • Incorporated in 1989, Rashi Peripherals Limited is a company that distributes global technology brands in India.
  • The company has two business verticals:
  • Personal computing, enterprise and cloud solutions
  • Lifestyle and IT essentials which includes the distribution of products like (i) components such as graphics cards, CPUs), motherboards; (ii) storage and memory devices; (iii) keyboards, mouce, webcams, monitors, wearables, casting devices, fitness trackers and gaming accessories; (iv) power devices i.e. UPS and inverters; and (v) networking and mobility devices.
  • It has a pan-India distribution network comprises 50 branches that operate for sales and as service centers and 63 warehouses, covering 680 locations in India, as of September 30, 2023.
  • It distributes products for global technology brands such as ASUS Global Pte. Ltd., Dell International Services India Private Limited, HP India Sales Private Limited, Lenovo India Private Limited, Logitech Asia Pacific Limited, NVIDIA Corporation, Intel Americas, Inc., Western Digital (UK) Limited, Schneider Electric IT business India Private Limited, Eaton Power Quality Private Limited, ECS Industrial Computer Co. Ltd., Belkin Asia Pacific Limited, TPV Technology India Pvt Ltd., LG Electronics India Private Limited, Toshiba Electronic Components Taiwan Corporation, and Harman International (India) Private Limited among others.
  • Promoters: Krishna Kumar Choudhary, Sureshkumar Pansari, Kapal Suresh Pansari, Keshav Krishna Kumar Choudhary, Chaman Pansari, Krishna Kumar Choudhary (HUF), and Suresh M Pansari HUF

Rashi Peripherals IPO: Financials

Particulars (₹ in cr.)2023 (06)2022 (06)2023 (12)2022 (12)2021 (12)
Revenue from Operations5,468.515,023.949,454.289,313.445,925.05
Revenue Growth (%)8.85%1.51%57.19%
EBITDA Margin (%)3.03%2.72%2.83%3.28%3.63%
Profit before Tax102.6189.41164.63239.85178.87
Net Profit72.0267.38123.34182.51136.35
Net Profit Margin (%)1.32%1.34%1.30%1.96%2.30%
Share Capital20.8920.8920.8920.891
Net Worth772.74647.79700.12575.07394.19
EPS – Basic & Diluted (₹)18.24^16.90^29.543.5731.2
RONW (%)9.86%^10.90%^17.60%31.66%33.07%
Net Asset Value (₹)184.94155.03167.56137.6394.34
Post issue Share Capital32.95    
IPO price311.0    
EPS Fy2318.7    
PE Fy2316.6    
EPS Fy24 (annualized)21.9    
PE Fy24  (annualized)14.2    
Market cap in cr2,049.5    
Market cap / Sales0.22    

Anchor: Rashi Peripherals IPO

Besides others ,anchor allocation was spread across 8 mutual fund schemes belonging to 3 asset management companies (AMCs). The mutual fund allocation in the anchor portion amounted to 33.89% of the total anchor size.

Rashi Peripherals IPO: Salient Points

  • Globally, the electronics and information and communications technology products market is expected to grow at a CAGR of 14% between 2020 and 2025 and is projected to cross USD 350 billion in sales by 2025. Information technology spending in India is projected to reach a value of approximately USD 136 billion by 2025 growing at a CAGR of 10%..
  • In the pre-IPO placement, Volrado Venture Partners Fund-III-BETA and ace investor Madhusudan Kela’s wife Madhuri Madhusudan Kela invested Rs 100 crore and Rs 50 crore, respectively.
  • From the issue proceeds, Rs. 326 cr will go for debt repayment. The present gross debt is 1,275 cr.
  • Rs. 220 cr will for for working capital.
  • The company’s Debt as of 1HFY24 stood at Rs 1,395 cr, with a Debt/Equity ratio of 1.8x. The IPO proceeds will significantly reduce the Debt/Equity ratio to 0.8x.
  • Peers
Company/₹ crCMP (₹)Revenue(cr)Net Profit(₹ cr)NPMPEMcap (cr)Macp/salesRONW%
Rashi Peripherals311.009468.9473003.2%16.6 (14.2)2,049.50.2217.60%
Redington India194.0079518.7114391.8%12.615,1350.1920.10%
  •  It has pan-India and multi-channel distribution footprint backed by dedicated in-house infrastructure. The company has one of the largest ICT products distribution networks in India. It has branches in 50 cities that operate as sales and service centers and warehouses, covering 680 locations in 28 States and Union Territories in India through an ecosystem of 8,407 customers, as of September 30, 2023.
  • They have Long-term relationships with marquee global technology brands supported by committed engagement. As of September 30, 2023, the company served 52 global technology brands in the country. These relations extend over several years.
  • It is one of the fastest growing distribution partners for global technology brands in India in terms of revenue growth between Fiscal 2021 and Fiscal 2023, according to a Technopak report.
  • It differentiates itself by offering end-to-end value-added services such as pre-sale activities, solutions design, technical support, marketing services, credit solutions and warranty management services.
  • It aims to expand its geographic presence in non-metro cities which includes tier I and tier II cities and rural geographies.
  • Company has been adding new verticals like servers and semiconductors and aims to extend this further.
  • They witnessed decrease in EBITDA Margin from 3.63% in Fiscal 2021 to 3.28% in Fiscal 2022 and further to 2.83% Fiscal 2023. The company operates in low margin, high volume business. Its margins look better than peer Redington though Redington has much higher revenues.
  • Rashi Peripherals IPO is coming at a PE ratio of 16.6x (fy23 earnings) and 14.2x (fy24 annualized earnings.
  • I intend to apply in Rashi Peripherals IPO. Returns in my view may not be substantial and IPO is good for medium to long term. Presence of a star investor may provide some limited fillip.
  • GMP as heard on Social Media may be around Rs. 51.
  • 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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