About the Company

Rishabh Instruments Limited is a global energy efficiency solutions company engaged in designing, developing, and manufacturing a wide range of electrical measurement and process optimization equipment’s utilized across numerous industries in the power, automotive and industrial sectors.

Rishabh Instruments Limited was founded in 1982 by Mr. Narendra Joharimal Goliya, an Electrical Engineer from the Indian Institute of Technology (IIT) Bombay. He is the Promoter, as well as the Chairman and Managing Director of the company and has more than four decades of experience in the manufacturing and electrical industry.

The company designs, develops, manufactures and supplies:-
1. Electrical Automation Devices.
2. Metering, Control, and Protection Devices.
3. Portable Test and Measuring Instruments.
4. Solar String Inverters.
5. Aluminium High Pressure Die Castings.

The following table states the contribution of each segment to the revenue from operations of the company for FY 2022-23.

The company primarily follows a Business-to-Business model. It has an extensive network of 175 authorized distributors/stockists across 81 districts in India. Globally, the company has served in more than 100 countries in the last three financial years through a strong global network of 339 authorized distributors/stockists. For FY 2022-23, 65.74% of the revenue from operations was generated from overseas operations.

The company manufactures all the products in-house from its five manufacturing facilities out of which two are in India, two in Poland and one is in China. Additionally, the company has two modification centers - one in Kennesaw, Georgia, United States and the other in Essex, England.

Key Parameters of the Industry

1. The global electrical automation market was valued at $ 147.5 billion in 2022 and is expected to grow at a CAGR of 7.8% to reach $ 215.1 billion by 2027. The Indian Electrical Automation market was valued at $ 6367.8 million in 2022 and is forecasted to grow at a CAGR of 9% to reach $ 9802.6 million by 2027.

2. Global Metering, Control and Protection Devices market was estimated at $ 34.08 billion in 2022 and is expected to witness a 4.8% CAGR to reach $ 43.04 billion by 2027. The Indian Metering, Control and Protection Devices market was valued at $ 660.8 million in 2022 and is forecasted to grow at a CAGR of 5.5% to reach $ 864.5 million by 2027.

3. Global Portable Test and Measurement market was estimated at $ 5.1 billion in 2022 and is forecasted to grow at a CAGR of 5.1% to reach $ 6.6 billion by 2027. Indian Portable Test and Measurement market was $ 163.46 million in 2022 and is estimated to grow at a CAGR of 6.9% between 2022 and 2027 and reach $ 228.6 million.

4. Solar string inverter market is expected to increase from $ 4.3 billion in 2022 to $ 6.6 billion in 2027 at a CAGR of 9.1%. The Indian solar string inverter market was valued at $ 778.14 million in 2022 and is forecasted to grow at a CAGR of 10.6% to reach $ 1290.6 million in 2027.

5. The Global High-Pressure Aluminium Die Casting market was $ 83.9 Bn in 2022. The market is forecast to grow at a CAGR of 6.1% between 2022 and 2027, to reach $ 112.9 Bn by 2027. The Aluminium High Pressure Die Casting market in India is estimated to grow from $ 4926.8 million in 2022 to $ 7377.0 million in 2027 at a CAGR of 8.4%.

IPO Objectives

1. Financing the cost of expansion of Nashik Manufacturing Facility.
2. General Corporate Purposes.

Financials

The company's revenue has exhibited robust growth, surging from Rs. 389.96 crores in the fiscal year 2020-21 to Rs. 569.54 crores in the fiscal year 2022-23, showcasing a CAGR of 20.85%. Over the same period, the company's EBITDA has risen from Rs. 70.02 crores to Rs. 86.32 crores in FY 2022-23, with a CAGR of 11.03%. Notably, the EBITDA Margin has undergone a decline from 17.96% in FY 2020-21 to 15.16% in FY 2022-23.

Meanwhile, the company's net profit has seen a noteworthy increase, climbing from Rs. 35.94 crores in FY 2020-21 to Rs. 49.69 crores in FY 2022-23, representing a CAGR of 17.58%. It is important to highlight that the net profit margin has declined slightly over the last year. Both the Return on Capital Employed (ROCE) and Return on Equity (ROE) have demonstrated stability within a certain range over this period.

Valuations

The company's price-to-earnings ratio (PE) stands at 47.32 for the higher price band and 44.85 for the lower price band. Similarly, the price-to-book ratio (PB) is 4.01 for the upper price band and 3.80 for the lower price band. Without comparable companies listed for reference, evaluating the company's valuation is challenging.

Key Risks

1. Significant dependence on the manufacturing facility at Poland. For FY 2022-23, 62.73% of the aggregate units were produced at one single manufacturing facility in Poland. Any slowdown or shutdown in manufacturing operations in Poland can have an adverse effect on the operations of the overall company.

2. The demand for the company’s products in foreign countries is subject to international market conditions and regulatory risks that could adversely affect its operations. For FY 2022-23, 65.74% of the revenue from operations was generated from overseas operations.

IPO Details