Racks & Rollers - Storage Technologies and Automation Limited’s SME Initial Public Offering to open on Tuesday, April 30, 2024, price band set at ₹73/- to ₹78/- per Equity Share

• Price Band of ₹73/- – ₹78/- per equity share bearing face value of ₹10/- each (“Equity Shares”

• Bid/Offer Opening Date – Tuesday, April 30, 2024 and Bid/Offer Closing Date – Friday, May 03, 2024.

• Minimum Bid Lot is 1600 Equity Shares and in multiples of 1600 Equity Shares thereafter.

• The Floor Price is 7.3 times the face value of the Equity Share and the Cap Price is 7.8 times the face value of the Equity Share

RISK TO INVESTORS

1. The Company is dependent on few numbers of customers for sales. Loss of any of this large customer may affect our revenues and profitability

2. We have certain outstanding litigation against us, an adverse outcome of which may adversely affect our business, reputationand results of operations

3. The unexpected loss, shutdown or slowdown of operations at our manufacturing plant could have a material adverse effect onour results of operations and financial condition.

4. Inaccurate estimation of risks, revenues, or costs for a projects could negatively impact our profitability and operational results. Actual costs during project execution may significantly deviate from bid assumptions, leading to challenges in recovering additional expenses and potentially having a material adverse effect on our operational results, cash flows, and financial condition.

5. Our operations are significantly influenced by the prices, availability, and quality of the raw materials essential for our production processes.

6. Failure to successfully implement our business strategies may materially and adversely affect our business, prospects, financial condition and results of operations.

7. Our existing customers does not guarantee realization of future income. Our revenue may be subject to modifications, cancellations, delays, holds, or partial payments by customers, which could have adverse effects on our operational results. 

8. We have experienced negative cash flows in the past, and we may have negative cash flows in the future. 

9. We operate our business from rented premises. 

10. We have incurred losses in the past and may continue to incur significant losses in the future. 

11. The Merchant Banker associated with the Issue has handled 50 public issues (SME Issues) out of which 12 opened below Issue price on listing day. 

12. Average cost of acquisition of Equity Shares held by our Promoters:- Khasim Sait, Mohammad Arif Abdul Gaffar Dor , Hanif A Khatri , Nuumaan Khasim , Syed Azeem , Afzal Hussain are Rs. 1.11 per equity share of each promoter.

13. The Price/ Earnings ratio based on basic EPS for Fiscal 2023 for the company at the Cap price is 48.45

14. Weighted Average Return on Networth for Fiscal 2023,2022 and 2021 is 6.29%

15. Weighted Average cost of acquisition, Floor and Cap Price

Types of transactions	Weighted average cost of acquisition (₹ per Equity Shares)	Floor price* (i.e. ₹ [73])	Cap Price* (i.e. ₹ [78])
Weighted average cost of acquisition of primary / new issue 18 months prior to RHP	NA^	NA^	NA^
Weighted average cost of acquisition for secondary sale/ acquisition 18 months prior to RHP	NA^^	NA^^	NA^^
Weighted average cost of acquisition of primary issuances / secondary transactions, during the 3 immediately preceding years*	-	-	-

^There were no primary/new issue of shares(equity/convertible securities) transaction, other than equity shares issued pursuant to bonus issue on January 10, 2024, in the last 18 months prior to the date of RHP. ^^There were no secondary sale/acquisition(equity shares) in the last 18 months prior to the date of RHP.

Mumbai, April 30, 2024: Bengaluru-based Racks & Rollers - Storage Technologies and Automation Limited is engaged in a storage racking system, with specialising in design, manufacturing, installation services of metal storage racks, automated warehouses and other storage solutions, has fixed the price band of ₹73/- to ₹78/- per Equity Share of face value ₹10/- each for its maiden initial public offer.  The Initial Public Offering (“IPO” or “Offer”) of the Company will open on Tuesday, April 30, 2024, for subscription and close on Friday, May 03, 2024. Investors can bid for a minimum of 1600 Equity Shares and in multiples of 1600 Equity Shares thereafter.

The issue consists of a fresh issue of up to 3,840,000 equity shares with no offer for sale (OFS) component. 

The Issue is being made through the Book Building Process, wherein not more than 50% of the Net Issue shall be available for allocation to Qualified Institutional Buyers, not less than 15% of the Net Issue shall be available for allocation to Non-Institutional Investors and not less than 35% of the Net Issue shall be available for allocation to Retail Individual Investors.

Of the total net proceeds to be raised through the issue, Rs 27.50 crore will be used to meet working capital requirements and general corporate expenses.

Racks & Rollers - Storage Technologies and Automation Limited was incorporated in the year 2010 by its promoter Mr. Mohammed Arif and Mr. Khasim Sait with experience of around, 13 years and 13 years in the storage racking system industry.

The company's commitment to delivering innovative and efficient solutions for diverse warehousing needs demonstrates their commitment in its wide range of products and services. These solutions cater to various industries such as oil & gas, automotive components & aerospace, food & beverages, cold storage, pharmaceuticals, textiles, retail, FMCG, and others, each with unique storage and logistical requirements.

The Bengaluru-based company operates with a customer-centric approach, driven by a focus on continuous innovation and operational efficiency. It offers a comprehensive range of display and storage racks designed for commercial and industrial purposes, utilizing high-quality raw materials to ensure durability and optimum strength in the finished products. These raw materials include different grades of mild steel (hot rolled coils, cold rolled coils, galvanized steel coils, PPGI coils, pipes, and structural sections), powder coatings for powder coating, epoxy, enamel paints, and plastic for packaging.

The company has a manufacturing unit that covers approximately 56,250 square feet in Singanayakanahalli, Yelahanka Hobli, Bangalore, along with a 56,250 square feet storage facility, supporting a streamlined manufacturing process. The company manages product design, manufacturing, quality checking, packaging, storing, and delivery processes across specialized segments of its infrastructure, all closely monitored by an experienced team of quality controllers.

Through its manufacturing prowess, competitive strengths, and strategic business approaches, Storage Technologies and Automation Limited is well-positioned to meet the evolving needs of its clients effectively. The company is dedicated to innovation, quality, and delivering economically feasible solutions that exceed client expectations.

As of April 01, 2024, the total order book value of the Company is ₹ 21.36 Crore.

Racks & Rollers - Storage Technologies and Automation Limited has turnaround from a loss of Rs 0.20 crore in the financial year 2022 to Rs 0.48 crore in the financial year FY23. Revenue during the year FY23 increased 16.39% to Rs 81.32 crore from Rs 69.87 crore in the previous year, primarily due to an increase in the business operations of the company and increase in number of customers.

For the seven months ended October 31, 2023, revenue from operations stood at Rs 52.92 crore, and profit after tax stood at Rs 3.59 crore.

OneView Corporate Advisors Private Limited is the sole book-running lead. The equity shares are proposed to be listed on SME Platform of BSE Limited.

Disclaimer: STORAGE TECHNOLOGY AND AUTOMATION LIMITED has filed a Red Herring Prospectus dated April 22, 2024 with the ROC. The Red Herring Prospectus shall be made available on the website of the SEBI at www.sebi.gov.in as well as on the website of the BRLM i.e., Oneview Corporate Advisors Private Limited at www.oneviewadvisors.com, the website of the BSE at www.bseindia.com. Any potential investor should note that investment in equity shares involves a high degree of risk and for details relating to such risks, see “Risk Factors” beginning on page 30 of the Red Herring Prospectus. 

The Equity Shares offered in the Offer have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws in the United States and  may not be offered or sold within the United States or to, or for the account or benefit of,,”U.S. persons” (as defined in Regulation S of the Securities Act),  except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the Equity Shares will be offered and sold (i) within the United States only to persons reasonably believed to be “Qualified Institutional  Buyers” (as defined in Rule 144A of the Securities Act) under Section 4(a) of the Securities Act and (ii) outside the United States in offshore transaction in reliance on Regulation S under the Securities Act and the applicable laws of the jurisdiction where those offer and sales occur. 

The Equity Shares have not been and will not be registered , listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and Application may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction.

LISTING:. The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on SME Platform of BSE Limited (“BSE SME”), in terms of the Chapter IX of the SEBI (ICDR) Regulations, 2018, as amended from time to time. Our Company has received an In-Principle Approval letter dated April 19, 2024 from BSE Limited (“BSE”) for using its name in this offer document for listing our shares on the “BSE SME”. For the purpose of this Issue, the designated Stock Exchange will be BSE Limited.

DISCLAIMER CLAUSE OF SECURITIES AND EXCHANGE BOARD OF INDIA (“SEBI Since the Issue is being made in terms of Chapter IX of the SEBI (ICDR) Regulations, 2018, the Red Herring Prospectus will be filed with SEBI in terms of the Regulation 246 (5) of the SEBI (ICDR) Regulations, 2018, and the SEBI shall not offer any observation on Offer Document. Hence, there is no such specific disclaimer clause of SEBI. However, investors may refer to the entire “Disclaimer Clause of SEBI” on page no. 237 of the Red Herring Prospectus.

DISCLAIMER CLAUSE OF THE SME PLATFORM OF BSE LIMITED (DESIGNATED STOCK EXCHANGE): "It is to be distinctly understood that the permission given by BSE Limited ("BSE") should not in any way be deemed or construed that the contents of the Red Herring Prospectus/ Prospectus or the price at which the equity shares are offered has been cleared, solicited or approved by BSE, nor does it certify the correctness, accuracy or completeness of any of the contents of the Red Herring Prospectus/ Prospectus. The investors are advised to refer to the Prospectus for the full text of the “Disclaimer clause of the SME Platform of BSE Limited” on page no. 239 of the Red Herring Prospectus