In the Indian SME sector, Rosmerta Digital Services’ impending IPO is expected to be a historic occasion. The IPO, which is expected to open for subscriptions on November 18, is the largest public offering from the SME sector to date with a target of raising Rs 206 crore. Investors are showing a great deal of interest in Rosmerta as it positions itself as a major participant in the automotive digital solutions market with a strong emphasis on expansion and innovation.
Credits: IPO
Record-Breaking IPO Size
Rosmerta’s IPO is more than just another SME offering—it’s a new benchmark. With an issue size of Rs 206 crore, it surpasses previous record holders such as Danish Power (Rs 197.9 crore), KP Green Engineering (Rs 189.5 crore), and Sahasra Electronics Solutions (Rs 186.16 crore). This trend toward larger IPOs indicates increasing investor confidence in SME businesses, as well as a growing appetite for high-potential companies in niche sectors.
In fact, the number of Rs 100 crore+ SME IPOs has jumped from just one in 2023 (Spectrum Talent Management) to ten in 2024, including Rosmerta’s. This shift underscores the evolving landscape of SME listings and signals a new era of capital inflow into promising small and medium enterprises.
Details of the Offering
Rosmerta’s IPO follows a book-built issue model, comprising a fresh issue of 1.4 crore equity shares. Unlike IPOs with an offer for sale component, this structure means that all proceeds, barring offer expenses, will be retained by the company to fuel its growth.
The IPO price band has been set between Rs 140 and Rs 147 per share. For institutional investors, an anchor book will open on November 14, ahead of the public issue, which will close on November 21. The basis of allotment will be finalized by November 22, with shares credited to eligible investors’ demat accounts by November 25. Rosmerta shares will debut on the BSE SME platform on November 26, marking a significant milestone for the company and the SME segment.
Strategic Use of IPO Proceeds
Rosmerta has laid out a clear roadmap for deploying the IPO funds. Out of the net proceeds: Rs 118.5 crore is earmarked for purchasing office space in Mumbai and establishing critical infrastructure, including warehouses, model workshops, and experience centers across India. These hubs will allow Rosmerta to enhance customer experience and strengthen distribution channels for automotive components and accessories.
Funds will also support IT infrastructure expansion and working capital needs to maintain operational efficiency.
The remaining proceeds will fuel inorganic growth through acquisitions and other strategic initiatives, as well as general corporate expenses. This focused investment approach positions Rosmerta to expand its footprint and reinforce its core competencies in digital solutions for the automotive industry.
Financials Indicate Impressive Growth
Rosmerta’s financial performance tells a compelling growth story. For the fiscal year ending March 2024, the company’s net profit soared to Rs 10.6 crore, a significant leap from Rs 1.6 crore the previous year. Revenue from operations also surged to Rs 84.19 crore, compared to Rs 29.8 crore in FY23, driven by rising demand for digitally enabled automotive services.
The momentum continued into FY25, with Rosmerta’s profits reaching Rs 14.8 crore on revenue of Rs 92.2 crore within just the first half of the year. These numbers show that Rosmerta is on track for robust year-on-year growth, an attractive proposition for potential investors.
Market Position and Competitive Edge
Because of its distinctive offers, which integrate digitally enabled services with channel sales of automobile components and accessories, Rosmerta distinguishes out in the SME market. Rosmerta’s ability to deliver superior digital solutions puts it at the forefront of the automobile industry’s growing embrace of digital transformation. The business can meet a variety of client needs in the automobile industry thanks to its integrated service approach, which covers everything from distribution to experiential workshops.
In addition, the company’s size and ambition set it apart from other SME listings, even overshadowing some smaller mainboard IPOs like those of Diffusion Engineers and Manba Finance. This distinction is likely to capture the attention of investors looking for SME stocks with strong growth potential.
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