Rajputana Stainless IPO: The initial public offering (IPO) of Rajputana Stainless is set to open for public subscription on Monday, March 9, and will remain open till Wednesday, March 11. The ₹254.98 crore book build issue is priced at ₹116 to ₹122 per share.
Rajputana Stainless IPO is a combination of fresh issue of 1,46,50,000 shares of face value of ₹10 each and an offer for sale (OFS) of 62,50,000 shares of face value of ₹10 each. From the fresh issue of shares, the company intends to raise ₹178.73 crore, which it will utilise for the expansion of the existing manufacturing facility at Panchmahal, Gujarat, the payment of certain outstanding borrowings, and general corporate purposes.
Share allotment is expected to be finalised on Thursday, March 12, and the stock may debut on the BSE and the NSE on Monday, March 16.
Nirbhay Capital Services Private Limited is the book-running lead manager, while KFin Technologies Limited is the registrar of the issue.
Meanwhile, grey markets do not appear to be enthusiastic about the issue at the current juncture. According to grey market sources, Rajputana Stainless IPO GMP (grey market premium) on Thursday morning was nil, indicating the stock could list at par with the issue price.
Before applying for the IPO, investors should be aware of the key risks of the company and the issue. Here are 10 key risks flagged in the RHP (Red Herring Prospectus) that investors should know:
1. Concentration of customers
The company derives a significant portion of revenue from operations from its top 10 customers. It does not have long-term contracts with all these customers.
According to the RHP, the company’s business can be adversely affected if one or more such customers choose not to source their requirements from the company or to terminate the contracts or purchase orders.
2. Regional risk
As per the RHP, the company derives the majority of its sales from the domestic market and a significant portion of its domestic sales is derived from Maharashtra, Gujarat, and Uttar Pradesh. Any adverse developments in these markets may adversely affect its business.
Moreover, its manufacturing facility and proposed facility are located in Gujarat, and therefore, its operation is highly vulnerable to regional conditions and economic downturns in the region.
3. Over-reliance on top suppliers
As per the RHP, the company substantially relies on its 10 suppliers of raw materials and work-in-progress goods used in its manufacturing processes.
“Any shortages, delay or disruption may have a material adverse effect on our business, financial condition, results of operations and cash flows,” the RHP reads.
4. Significant contingent liabilities
As per the RHP, the company has contingent liabilities of ₹120.82 crore, which is 68.40% of its net worth. The company says its financial condition and operation may be adversely affected if any of these contingent liabilities materialise.
5. High volume-low margin business model
The company manufactures long and flat stainless-steel products. The stainless-steel industry is a high-volume, low-margin business, largely due to higher operating costs.
As per the RHP, the company’s inability to regularly increase its turnover and effectively execute its key business processes could lead to lower profitability and adversely affect operating results, debt service capabilities and financial conditions.
6. Single operational manufacturing facility
The company has a single operational manufacturing facility in Gujarat, which is subject to operating risks. Any unscheduled, unplanned or prolonged disruption of its manufacturing operations can adversely affect the company’s sales and revenues.
7. The company’s negative cash flows
The company had negative cash flows from investing and financing activities for the six-month period ended September 30, 2025, FY25, FY24, and FY23. As per the RHP, it may experience similar negative cash flows in the future.
8. Competitive industry
The company’s business is highly competitive, with many large established players. Moreover, the market is still highly fragmented.
The company says if the trend towards consolidation continues, it could be placed at a disadvantageous competitive position.
9. Cyclical nature of the industry
The steel industry is cyclical in nature, and the pricing depends on the market demand, volatility and economic conditions.
Global slowdown, availability of raw materials and price volatility, trade barriers and environmental concerns and regulations may have an adverse effect on the company’s business.
10. Macro risk
Inflation can have a significant impact on the company’s profitability. Elevated inflation may increase its raw material costs, rents, salaries or wages payable to employees or any other expenses.
The company may not be able to pass on any additional expenses to its customers, which could affect its profitability and financial condition.
Read all IPO-related news here
Read more stories by Nishant Kumar
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
