Upcoming IPO: Rajesh Power Services Public Issue To Open For Subscription On November 25; Details

Gujarat-based Rajesh Power Services is gearing up to launch its Rs 160-crore initial public offering (IPO) on November 25, marking the sixth SME IPO this month despite ongoing challenges in the equity market. The IPO comprises a fresh issue of up to 27.9 lakh equity shares worth Rs 93.5 crore (at the upper price band) and an offer-for-sale (OFS) of 20 lakh shares valued at Rs 67 crore by the promoters, the Panchal and Patel families.

Key Details of the Offering
The IPO is priced in the range of Rs 320-Rs 335 per share, offering investors an opportunity to tap into the solar power generation and services sector. Institutional investors can participate in the anchor book, which opens on November 22, while the public subscription period will close on November 27.

The net offer size (total issue size minus the market maker's portion) is allocated as follows:
50% for Qualified Institutional Buyers (QIBs)
15% for Non-Institutional Investors (NIIs)
35% for Retail Investors
Retail investors can bid for a minimum lot of 400 shares, amounting to Rs 1.34 lakh at the upper price band. The maximum investment for retail investors is capped at Rs 2 lakh, in line with IPO regulations.

About Rajesh Power Services
Rajesh Power Services specializes in providing turnkey project execution, operation and maintenance, and consultancy services for power utility companies across both renewable and non-renewable energy sectors. With an impressive order book worth Rs 2,358.2 crore as of March 2024, the company has projects lined up for execution over the next three financial years.

In addition to its core operations, the company has invested in HKRP Innovations, which offers Internet of Things (IoT) and cloud-based solutions for power grids and the renewable energy sector. HKRP's suite of solutions includes Smart Feeder Management System (SFMS), Virtual Feeder Segregation (VFS), Real-Time Monitoring Systems (RTMS) for oil wells, and Solar Energy Data Management (SEDM).

Utilization of IPO Proceeds
The proceeds from the fresh issue will be directed towards several strategic initiatives, including Rs 25.1 crore for purchasing cable identification, testing, and fault location equipment, setting up a 1,300 KW DC solar power plant, and advancing in-house expertise for green hydrogen production and related equipment like electrolysers. The company will use Rs 30 crore to meet additional working capital requirements, and the remainder will be used for general corporate purposes.

Financial Performance
Rajesh Power Services has shown robust financial growth over the years. In the fiscal year ending March 2024, the company reported a standalone net profit of Rs 26.02 crore, a jump from Rs 6.75 crore in FY23. During the same period, revenue surged to Rs 285 crore, up from Rs 207.2 crore the previous year. In the first half of FY25 (ending September 2024), the company recorded a profit of Rs 27.7 crore on a revenue of Rs 313.06 crore.

Rajesh Power Services operates in a competitive space, with peers such as Advait Infratech, Kay Cee Energy and Infra, and Viviana Power Tech. However, its diversified offerings, including turnkey solutions and IoT-enabled services, position it as a significant player in the renewable energy sector.

IPO Management and Outlook
The IPO is being managed by ISK Advisors as the sole book-running lead manager, while Bigshare Services serves as the registrar. The IPO's success will depend on how well it attracts investors amid current market conditions.