Rajputana Biodiesels IPO Listing: Stock lists at 90% premium on NSE SME

Rajputana Biodiesels IPO Listing

Rajputana Biodiesels IPO Listing: Investor Gains Surge 90% on Day One, Shares Hit Upper Circuit Limit

Rajputana Biodiesels, a company engaged in the production of biofuels and their by-products, has made an outstanding debut on the National Stock Exchange (NSE) SME platform today.

The company’s ₹24.70 crore Initial Public Offering (IPO), which was open for subscription from November 26 to November 28, has delivered remarkable returns to investors. At the time of listing, the shares opened at ₹247, marking a 90% premium over the issue price of ₹130.

By the close of trading on the first day, the stock had surged even further, reaching the upper circuit limit of ₹259.35, locking in an almost 100% gain for IPO investors.

This exceptional market debut highlights the growing investor confidence in Rajputana Biodiesels and its business prospects, especially in the fast-evolving biofuels sector.

In this article, we take a closer look at the IPO’s phenomenal response, the company’s growth trajectory, and what lies ahead for this renewable energy player.

IPO Response: Overwhelming Investor Demand

Rajputana Biodiesels’ IPO received an unprecedented response from investors. It was subscribed 718.81 times overall, reflecting a highly positive market sentiment toward the company. The subscription data is especially noteworthy in different categories:

• Qualified Institutional Buyers (QIBs): The QIB portion was oversubscribed by 177.38 times, indicating strong institutional interest in the company’s prospects.
• Non-Institutional Investors (NIIs): The NII portion saw a jaw-dropping oversubscription of 1,345.96 times, showcasing retail and high-net-worth individuals’ enthusiastic participation in the offering.
• Retail Investors: Retail investors also flocked to the IPO, with their portion being subscribed 746.57 times.

This overwhelming demand is a testament to the market’s growing interest in the renewable energy sector, particularly biofuels, which are seen as critical to reducing global carbon emissions and combating climate change.

Rajputana Biodiesels’ diversified product portfolio, strong financial performance, and future growth prospects contributed to the positive investor sentiment.

The IPO offered 19 lakh new equity shares at a face value of ₹10 each. The issue price was set at ₹130 per share, which was deemed attractive given the company’s solid fundamentals and expansion plans.

The funds raised through this IPO are earmarked for financing the expansion of its Meerut-based subsidiary, Nirvanraj Energy Private Limited, to increase its manufacturing capacity, meet working capital needs, and support general corporate purposes.

A Strong Market Debut: Almost Doubling Investor Wealth

Rajputana Biodiesels’ market debut today on the NSE SME platform was a huge success, with its shares opening at ₹247, representing a 90% premium over the issue price of ₹130.

This sharp jump immediately rewarded IPO investors who had placed their faith in the company’s future growth potential.

After a brief surge in the early minutes of trading, the stock continued its upward trajectory, ultimately hitting the upper circuit limit of ₹259.35 and closing at this level by the end of the trading day.

The upper circuit limit reflects the maximum allowable price movement for a stock within a trading session, indicating that there was no selling pressure and investors were eager to hold onto their shares for potential future gains.

For those who participated in the IPO, this listing gain marks a significant financial windfall. With the shares almost doubling in value on the first day itself, the strong debut of Rajputana Biodiesels demonstrates investor confidence in both the company’s business model and its strategic growth plans.

Business Overview: Driving Sustainability through Biofuels

Rajputana Biodiesels, incorporated in 2016, is a leading manufacturer of biodiesel and its by-products, such as glycerin, fatty acids, caustic potash flakes, and more.

The company operates a production facility in Phulera, Rajasthan, and has a current biodiesel production capacity of 24 kilolitres per day, with an approved capacity of 30 kilolitres per day.

This facility produces a range of products that are vital to the biofuels industry and related sectors, including:

• Biodiesel: A renewable and sustainable alternative to conventional diesel, made from plant-based oils and animal fats.
• Crude Glycerin: A by-product of biodiesel production, used in industries like cosmetics, pharmaceuticals, and food processing.
• Caustic Potash Flakes: Used in manufacturing soap, detergents, and other industrial applications.
• Used Cooking Oil: Collected from food industries and converted into biodiesel, contributing to sustainability.
• Steroid Fatty Acids, Sodium Methoxide, Citric Acid, and More: A diverse product portfolio for various industries.

The company’s business model aligns with the growing global emphasis on sustainable energy sources. As governments and industries push for cleaner alternatives to fossil fuels, companies like Rajputana Biodiesels are well-positioned to benefit from this transition.

Biodiesel is not only a cleaner fuel alternative but also plays a crucial role in reducing greenhouse gas emissions, making it highly sought after in the current environmental landscape.

Financial Performance: A Story of Rapid Growth

Rajputana Biodiesels has demonstrated robust financial growth since its inception. The company’s revenues and profits have steadily increased, reflecting its expanding market presence and growing demand for its products.

In the financial year 2022, Rajputana Biodiesels posted a net profit of ₹19.97 lakh, which jumped to ₹1.69 crore in FY 2023. This impressive growth continued into the FY 2024, with the company reporting a net profit of ₹4.52 crore.

During the same period, its revenue grew at a compound annual growth rate (CAGR) of more than 75%, reaching ₹53.68 crore by FY 2024.

For the 2024-25 financial year (April to July), Rajputana Biodiesels has already reported a net profit of ₹2.60 crore and revenue of ₹27.79 crore—indicating that the company is on track for another strong year.

This solid financial performance is a testament to the company’s operational efficiency, strong market demand, and ability to capitalize on opportunities in the renewable energy space.

Future Prospects: Capitalizing on Growing Demand

The future looks promising for Rajputana Biodiesels, as it is well-positioned to capitalize on the growing global demand for sustainable energy solutions.

The company’s focus on biodiesel production and its by-products places it in a strong competitive position in an industry that is expected to expand rapidly in the coming years.

Furthermore, the funds raised through the IPO will support the company’s growth plans, including the expansion of production capacity, enhancement of working capital, and strategic investments in its subsidiary.

As global policies continue to push for cleaner, greener alternatives to fossil fuels, Rajputana Biodiesels stands to benefit significantly from the increased adoption of biofuels.

Final Remarks

Rajputana Biodiesels’ IPO has been a resounding success, with shares delivering impressive returns to investors on the very first day.

The company’s strong financials, growing product portfolio, and focus on sustainable energy solutions make it an attractive investment in the renewable energy space.

As the demand for biodiesel and other biofuels continues to rise, Rajputana Biodiesels is poised for continued growth and success, making it a company to watch in the coming years.