Rosmerta Digital Services IPO: Biggest SME IPO Opens on November 18 – Full Details & Price Band
Rosmerta Digital Services IPO
Rosmerta Digital Services IPO: India’s Largest SME IPO Opens on November 18 – Price Band, Subscription Details & Future Prospects
Rosmerta Digital Services, a leading player in the digital automotive services space, is set to launch the largest SME IPO in India’s history.
The company is aiming to raise ₹206 crore through this public offering, marking a significant milestone for both the company and the broader SME IPO landscape in India.
The IPO will open for subscription on November 18, 2024, and remain open until November 21, 2024.
The price band for the offer has been fixed at ₹140 to ₹147 per share, providing a rare opportunity for investors to participate in a high-growth sector with a robust financial track record.
This IPO is generating significant interest, not just because of its scale but also due to the rapid expansion and growth prospects of Rosmerta Digital Services in the automotive and digital services sectors.
This article delves into the key aspects of the upcoming IPO, including its size, financials, strategic use of funds, and what investors can expect from the offering.
India’s Largest SME IPO So Far
Rosmerta’s IPO will be the largest SME IPO in India’s history, surpassing previous records held by companies like Danish Power, which raised ₹197.9 crore, and KP Green Engineering, which raised ₹189.5 crore.
This marks a significant upward trend in the size of SME IPOs in India, which had traditionally been smaller in scale compared to their large-cap counterparts.
Prior to this, the largest SME IPOs were capped at around ₹150 crore to ₹200 crore, but Rosmerta’s offering breaks that ceiling, setting a new benchmark for other companies in this segment.
The growing demand for SME investments is reflected in this increase in offering sizes, as the Indian stock market continues to develop and attract more interest from institutional and retail investors alike.
The Growing Trend of Larger SME IPOs
The trend toward larger SME IPOs has been building steadily in recent years. In 2024, 10 SME IPOs have already been launched with a minimum issue size of ₹100 crore, showcasing the increasing appetite for larger offerings.
This is a marked departure from previous years when SME IPOs were predominantly smaller, with many raising amounts under ₹50 crore or ₹100 crore.
For comparison, in 2023, only one SME IPO exceeded ₹100 crore—Spectrum Talent Management, which raised ₹102 crore.
In this context, Rosmerta Digital Services’ ₹206 crore offering stands as a testament to the growing maturity of the SME sector, which is becoming more attractive to institutional investors who are now looking for high-potential companies with robust growth plans.
Moreover, the size of Rosmerta’s IPO also surpasses the smallest IPOs in the mainboard segment, including companies like Diffusion Engineers, Manba Finance, and Gala Precision Engineering.
This is significant because it underscores the rising profile of SME listings and signals that smaller companies are increasingly able to tap into mainstream investment channels.
How Rosmerta Digital Services Plans to Use IPO Funds
Rosmerta Digital Services provides digitally enabled solutions for the automotive sector, with a focus on automotive components and accessories.
The company’s business model revolves around leveraging technology to streamline the sales and distribution process in the automotive supply chain.
The ₹206 crore raised from this IPO will be deployed for several key growth initiatives that will help the company expand its footprint and further scale its operations. Here’s a breakdown of how the funds will be utilized:
- Office Space and Infrastructure in Mumbai – A significant portion of the proceeds, around ₹118.5 crore, will be used to acquire office space in Mumbai, which is a strategic hub for businesses in India. This will support the company’s corporate and operational expansion.
- Warehouses and Experience Centres – The funds will also be allocated towards setting up warehouses, model workshops, and experience centres across various regions of India. These centres will allow Rosmerta to better showcase its products and services to customers, enhancing the company’s retail and wholesale presence.
- IT Infrastructure and Working Capital – A part of the raised capital will be used to strengthen the company’s IT infrastructure, which is critical for its operations in the digital services space. Additionally, some of the funds will be directed toward meeting working capital requirements, which will enable Rosmerta to handle its expanding business needs more efficiently.
- Inorganic Growth through Acquisitions – The company has also earmarked a portion of the funds for strategic acquisitions. This could help Rosmerta accelerate its growth trajectory by acquiring complementary businesses, technologies, or assets that would further solidify its position in the market.
- General Corporate Purposes – The remaining funds will be utilized for general corporate purposes, which could include scaling operations, enhancing marketing efforts, or entering new markets.
Financial Performance and Growth Trajectory
Rosmerta Digital Services has shown impressive growth over the past few years, making it an attractive investment option for potential investors.
For the fiscal year ending March 2024, the company reported a net profit of ₹10.6 crore, a sharp increase from ₹1.6 crore in FY 2023. Revenue also surged from ₹29.8 crore to ₹84.19 crore during the same period.
This represents a strong year-on-year growth of 183% in profit and a 180% increase in revenue, highlighting the company’s ability to scale quickly in a competitive and high-growth sector.
More impressively, in the first half of the current financial year (FY 2024), Rosmerta has already surpassed its entire previous year’s financial performance, reporting a profit of ₹14.8 crore on ₹92.2 crore in revenue.
This demonstrates the strong momentum and operational efficiency the company has achieved in recent years.
IPO Timeline and Key Dates
- November 14, 2024: IPO opens for anchor investors for a one-day subscription.
- November 18-21, 2024: The IPO opens for public subscription.
- November 22, 2024: Allotment of shares to successful investors.
- November 25, 2024: Shares credited to the demat accounts of investors.
- November 26, 2024: Trading commences on the BSE SME platform.
Merchant Bankers and Advisory
Rosmerta Digital Services has appointed Narnolia Financial Services and Beeline Capital Advisors as the lead merchant bankers for the IPO.
These institutions bring substantial experience and expertise to the table, ensuring that the IPO is managed effectively and reaches a wide spectrum of investors.
Investment Opportunities and Conclusion
Rosmerta Digital Services’ IPO presents an exciting opportunity for investors looking to tap into the rapidly growing digital services and automotive sectors.
With a robust financial track record, a clear growth strategy, and a larger-than-usual IPO size, this offering is poised to attract significant interest from both institutional and retail investors.
For those seeking to participate, it’s important to carefully review the company’s financials, business model, and growth prospects.
If Rosmerta continues its impressive growth trajectory, the IPO could offer considerable upside potential.
In conclusion, Rosmerta Digital Services’ IPO represents a unique opportunity in India’s fast-evolving SME market.
As the company expands and executes on its strategic initiatives, it could deliver strong returns for early investors, making this a noteworthy listing to watch closely.
