Rajesh Power IPO Listing: Stock lists at 90% premium on BSE SME

Rajesh Power IPO Listing

Rajesh Power IPO Listing: Investor Money Doubles on Day One as Shares Surge 90% Above Issue Price

Rajesh Power Services’ Initial Public Offering (IPO) has marked a successful debut, with the company’s shares skyrocketing on the very first day of trading.

The ₹160.47 crore IPO, which opened for subscription from November 25-27, was listed on the BSE SME platform today.

The IPO was well-received by investors, with shares of Rajesh Power Services surging 90% above the issue price, leading to a significant windfall for those who participated in the offering.

By the close of the first trading day, investors’ money had nearly doubled, as the stock price hit the upper circuit limit.

IPO Details and Strong Market Response

Rajesh Power Services issued its IPO at ₹335 per share, attracting a significant amount of investor interest.

The IPO was subscribed a total of 59 times, a clear indication of the market’s confidence in the company’s future growth.

The subscription details reveal that the Qualified Institutional Buyers (QIB) portion was oversubscribed by 46.39 times, while the Non-Institutional Investors (NII) portion was heavily oversubscribed by 138.46 times. The retail investor portion also received significant interest, with a subscription rate of 31.96 times.

On the listing day, the stock debuted at ₹636.50 on the BSE SME platform, providing investors with a robust listing gain of 90%.

However, the stock’s upward momentum did not stop there. By the end of the trading day, the price reached ₹668.30, hitting the upper circuit limit.

This was an excellent result for those who had subscribed to the IPO, marking a significant jump from the issue price and effectively doubling their investment in just one day of trading.

The Breakdown of the IPO and Its Uses

Rajesh Power Services’ IPO was a combination of fresh share issuance and an Offer for Sale (OFS) by existing shareholders.

A total of 20 lakh shares with a face value of ₹10 were sold under the Offer for Sale (OFS) route, allowing the current shareholders to cash out some of their holdings.

The fresh issue portion raised ₹93.47 crore, which will be used for several key purposes that align with the company’s future growth strategies.

The primary use of the proceeds includes investments in advanced equipment for the company’s operations.

Rajesh Power intends to purchase cable identification, testing, and fault location equipment, which is critical for ensuring the efficient operation of the power grid systems it services.

Additionally, the funds will support the development of a 1300 kW DC solar power plant, further strengthening the company’s foothold in the renewable energy sector.

Further expansion into green energy is another major use of the proceeds. Rajesh Power plans to use the funds to develop technical expertise in green hydrogen, an emerging field in the energy market.

This will include investments in electrolysers and related technologies. The funds will also be used to support general corporate purposes, including working capital requirements, which are vital for maintaining the company’s operational flexibility and ensuring its ongoing growth.

Company Overview: A Legacy of Expertise in the Power Sector

Founded in 1971, Rajesh Power Services has built a strong reputation for providing consultancy services to both government and private power companies across India.

The company offers a wide range of services, including power system design, engineering, and maintenance, as well as project management and consultancy services.

Rajesh Power has become a trusted name in the energy sector, working with some of the country’s largest power companies and contributing to the development and optimization of India’s power infrastructure.

In addition to its consultancy services, Rajesh Power also holds a significant investment in HKRP Innovations, a company that offers customized IT solutions specifically for the energy sector.

HKRP Innovations specializes in Internet of Things (IoT) and cloud-based solutions for power grids and renewable energy, developing technologies like the Smart Feeder Management System (SFMS), Virtual Feeder Segregation (VFS), and Real-Time Monitoring Systems for solar energy and oil wells.

This investment aligns with Rajesh Power’s broader strategy to expand into emerging technologies that complement its core offerings.

Financial Performance and Growth Potential

Rajesh Power Services has shown impressive growth over the years. In the financial year 2022, the company reported a net profit of ₹3.45 crore, which increased to ₹6.75 crore in the next fiscal year (2023).

However, in the financial year 2024, the company reported a loss of ₹26.02 crore. Despite this setback, Rajesh Power’s revenue growth has remained strong, increasing at a compound annual growth rate (CAGR) of over 40% annually, with total revenue reaching ₹295.06 crore in FY 2024.

Looking at the current financial year, Rajesh Power Services is showing signs of recovery and robust growth.

In the first half of FY 2024-25 (from April to September), the company reported a net profit of ₹27.68 crore, demonstrating a strong rebound after the previous year’s loss.

Additionally, the company’s revenue reached ₹317.85 crore, reflecting its capacity for continued expansion and its growing market share within the energy sector.

Rajesh Power’s focus on renewable energy, advanced power grid technologies, and its strategic investments in green hydrogen technology suggest that the company is positioning itself for sustained growth.

The company’s leadership in power consultancy services combined with its technological investments make it a strong player in the rapidly evolving energy sector.

Looking Ahead: Future Growth Prospects

The IPO listing performance and the subsequent price surge demonstrate the high demand and confidence in Rajesh Power Services’ potential.

The company is poised for continued growth in both traditional power sector consultancy and renewable energy.

With its investments in green technologies like solar power and hydrogen, along with its expertise in power grid optimization, Rajesh Power is well-positioned to capitalize on the growing shift towards sustainable energy in India.

The company’s ongoing focus on innovation, infrastructure development, and expanding its service offerings bodes well for its future prospects.

With the funds raised from the IPO, Rajesh Power has the financial backing to accelerate its expansion plans, improve its technological capabilities, and strengthen its presence in the renewable energy sector, which is becoming an increasingly important part of India’s energy landscape.

Final Remarks

The Rajesh Power IPO has proven to be a resounding success, with the stock’s debut providing impressive gains for investors on the very first day.

With significant capital raised and a clear strategy for future growth, Rajesh Power Services is well-positioned to continue expanding its business, particularly in the rapidly growing sectors of renewable energy and power grid management.

The overwhelming response to its IPO reflects investor confidence in the company’s vision and its ability to capitalize on the evolving energy market, making it a stock to watch in the coming years.