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Refractory Shapes Limited IPO Review

Updated: May 8

Refractory Shapes Limited IPO Review

Refractory Shapes Limited, a name synonymous with quality and innovation in the field of refractory products, has been a stalwart in the industry since its inception in 1973. The company, with its roots firmly planted in Pune, India, has grown from a modest beginning to a renowned entity in the manufacturing of specialized refractory shapes, catering to a diverse range of industries including steel, refineries, fertilizers, petrochemicals, and glass, among others.

The company's journey is a testament to the vision and dedication of the promoter family, led by Mr. Dayashankar Krishna Shetty, Ms. Pratibha Dayashankar Shetty, and Ms. Prajna Shravan Shetty. Their leadership has not only steered the company through five decades of business but also laid a strong foundation for future growth. In 2022, the company celebrated its 50th anniversary, marking half a century of commitment to excellence and customer satisfaction.

Pune, known for its rich cultural heritage and as an educational hub, also serves as the cradle for Refractory Shapes Limited. The company's manufacturing unit, equipped with state-of-the-art technology, is strategically located in Pune, approximately 170 kilometers from Mumbai, the financial capital of India. This location has been pivotal in enabling efficient logistics and access to a skilled workforce, contributing to the company's success.

The inception of Refractory Shapes Limited was driven by the need to fill a void in the market for high-quality, custom-made refractory shapes. The company was established with the goal of producing refractory products that could withstand the demanding conditions of various industrial processes, thereby enhancing operational efficiency and prolonging the lifespan of equipment. This focus on tailored solutions and superior performance has been the cornerstone of the company's enduring legacy.

Refractory Shapes Limited has consistently demonstrated its commitment to innovation and growth. In 2021, the company commissioned an additional plant in Wankaner, Gujarat, expanding its manufacturing capabilities over a sprawling 10-acre facility. This expansion underscores the company's philosophy of embracing challenges as opportunities and its passion for delivering practical engineering solutions that unlock efficiency. The company's IPO in 2024 marked a new chapter in its history, inviting shareholders to be part of its journey of scaling up and exploring new horizons. With a focus on research and development, Refractory Shapes Limited is poised to continue its legacy of innovating excellence in every detail.

Competitive Strengths

Refractory Shapes Limited, a Pune-based brick manufacturing company, has carved a niche for itself in the refractory segment, which is known for its intense competition and fragmented market. Established in 1973, the company has demonstrated a steadfast commitment to innovation and quality, which has translated into a series of competitive strengths that position it well for the future.

Revenue, Sales, and Profit

Refractory Shapes Limited has reported a consistent growth in revenue over the past few years. For the fiscal years 2021, 2022, and 2023, the company's revenue from operations was Rs. 20.89 crore, Rs. 25.50 crore, and Rs. 37.97 crore, respectively. The profit after tax (PAT) for these years was Rs. 1.56 crore, Rs. 2.87 crore, and Rs. 1.92 crore, respectively. However, it's important to note that while the revenue saw a significant increase, the PAT experienced a drop in FY 2023 compared to the previous year. This could be indicative of increased operational costs or other factors affecting profitability. As of the end of 2023, the balance sheet reflects a share capital of Rs. 15.8 crore with reserves and surplus adding up to Rs. 39.32 crore. The company's total income for the nine months ending on December 31, 2023, stood at Rs. 29.99 crore, with a net profit of Rs. 3.08 crore. These figures highlight the company's financial performance and growth trajectory.

Distribution Network and Geographical Reach

Refractory Shapes Limited, established in 1973, has developed a robust distribution network and extensive geographical reach over the years. The company specializes in manufacturing a diverse range of refractory products, including bricks, castables, high alumina catalysts, and ceramic balls, tailored for industries such as steel, refineries, fertilizers, petrochemicals, glass, and cement. Their engineered refractories are designed to withstand extreme conditions, enhancing operational efficiency and prolonging equipment lifespan. With a PAN India presence, Refractory Shapes Limited serves a wide clientele across 17 states and 2 Union territories, showcasing its significant domestic market penetration. Additionally, the company's status as an approved vendor with Engineer India Limited since 2007 has facilitated its involvement in numerous green field projects, further expanding its reach. The company's commitment to quality and customer service is evident in its enduring relationships with various industries, ensuring a steady demand for its specialized refractory products.

Unique Features

The company's manufacturing prowess is evident in its tailored products like Dome Bricks, Hexagonal Tiles, Circle Bricks, and Alumina Lumps of High Purity, which find applications across industries such as fertilizers, petrochemicals, glass, and cement. These products are engineered to withstand the demanding conditions of these sectors, enhancing operational efficiency and prolonging equipment life. The in-house design team at Refractory Shapes Limited is adept at creating refractories as per licensor or client specifications, showcasing the company's commitment to customization and innovation. In addition to manufacturing, Refractory Shapes Limited also engages in trading activities, providing items like Metallic Anchors and various raw materials required for refractory castables. This trading aspect allows the company to offer a comprehensive range of solutions to its clients, further solidifying its position in the market. With plans to expand and set up a new manufacturing unit in Wankaner, Gujarat, the company is poised for growth, aiming to enhance its production capabilities and meet the increasing demand for its specialized refractory products.

Investment in Research and Development

Refractory Shapes Limited (RSL) has shown a commitment to innovation and quality through its investment in research and development (R&D). The company's focus on R&D is evident from its recent Initial Public Offering (IPO), where it raised funds to further its growth and development. A portion of the IPO proceeds, amounting to Rs. 18.60 crores, is earmarked for various strategic initiatives, including the expansion of existing units and the purchase of new plant and machinery. This investment is indicative of RSL's dedication to enhancing its manufacturing capabilities and product offerings. The company's R&D efforts are geared towards developing high-performance refractory products that can withstand extreme conditions in various industries such as steel, refineries, fertilizers, petrochemicals, and glass.

Refractory Shaped Limited IPO Details

  • Issue Date: The Issue Date in an Initial Public Offering (IPO) refers to the specific day when a company's shares are first made available for public purchase on the stock market. This date is a critical milestone in the IPO process, marking the transition of a company from private to public status and allowing investors to buy shares directly from the company for the first time. (Issue Date: May 6, 2024 to May 9, 2024).

  • Listing Date: The listing date refers to the day when the company's shares are officially listed and begin trading on a stock exchange. This is typically several business days (3-6 days) after the issue date after processes like share allotment and finalization are completed. On this date, investors who were allotted shares during the IPO can begin selling them, and new investors can start purchasing them on the exchange at the prevailing market price. (Listing Date: Tuesday, May 14, 2024).

  • Face Value of Shares: The face value of shares in an Initial Public Offering (IPO) refers to the original cost of the shares as determined by the company going public. It represents the nominal value and is often set at a lower figure, such as Rs. 10 or Rs. 100, which remains constant irrespective of the market price of the share after the company is listed on the stock exchange. When a company launches an IPO, the shares are typically offered at a price that includes this face value plus an additional premium, which reflects the current market valuation of the company. The premium over the face value is determined by the company's financial performance and future growth prospects as assessed by the investment bankers managing the IPO. (Face Value: ₹10 per share).

  • Price Band: A price band of an IPO is the range of prices within which the investors can bid for the shares of a company that is going public. The price band is set by the issuer and the lead managers of the IPO, based on various factors such as the demand and supply of the shares, the financial performance and valuation of the company, and the market conditions. (IPO Price: ₹27-₹31 per share).

  • Lot Size: In the context of an Initial Public Offering (IPO), the term "lot size" refers to a fixed number of shares that the issuing company sets as the minimum quantity that investors can apply for. This lot size is predetermined before the IPO and is mentioned in the application forms. The lot size varies from one company to another and is an important factor for investors to consider when applying for an IPO. (Lot Size: 4000 Shares).

  • Total Issue Size: The total issue size represents the total number of shares the company is offering to raise capital through the IPO. This number is determined by the company and its advisors, considering factors like their funding needs and the expected investor demand. The total issue size is then divided by the lot size to determine the total number of lots available for purchase by investors. (Total Issue Size: 6,000,000 shares (aggregating up to ₹18.60 Cr)).

  • Fresh Issue: A Fresh Issue in the context of an Initial Public Offering (IPO) refers to the creation and sale of new shares by a company to the public. Unlike an Offer for Sale, where existing shareholders sell their shares, a Fresh Issue results in the generation of new capital for the company. This capital is typically used for growth initiatives such as expansion, research and development, or debt repayment. (Fresh Issue: 6,000,000 shares (aggregating up to ₹18.60 Cr)).

  • Issue Type: The type of an IPO can vary depending on the market and regulatory conditions. Some of the common types of IPOs are, Fixed priced IPO, Auction IPO, Book Building IPO, and Hybrid IPO. (Issue Type: Book Build Issue IPO).

  • Listing At: An integral part of the IPO process is the listing. This refers to the day the company's shares officially begin trading on a stock exchange, such as the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE) in India. Once listed, anyone with a brokerage account can buy and sell the company's shares on the exchange. (Listing at: NSE SME).

  • Retail Shares Offered: Retail shares offered in an IPO refer to the portion of shares that are specifically allocated for individual investors, as opposed to institutional investors. These shares are part of the public offering where companies going public aim to raise capital by selling shares. Retail investors are typically allocated a certain percentage of the total shares available for the IPO. The allotment process for retail investors is designed to be fair and transparent, ensuring that all investors have an equal chance of receiving shares based on their application and market conditions. (Retail Shares Offered: 1,996,000 (33.27%)).

  • Anchor Investor Shares Offered: Anchor investors are qualified institutional buyers who are allocated shares in an IPO before it opens to the public. They play a crucial role by committing to purchase shares at a set price, thereby stabilizing and boosting confidence in the IPO among other potential investors. Typically, anchor investors are subject to a lock-in period, during which they cannot sell their shares, ensuring their investment aligns with the long-term success of the company. (Anchor Investor Shares Offered: 1,700,000 (28.33%) ).

  • Market Makers Shares Offered: Market Maker Shares in an IPO refer to the shares that are allocated to market makers, who are responsible for improving the liquidity and facilitating better price discovery of the stock post-IPO. Market makers are registered members of the stock exchange and provide two-way quotes, buying and selling shares at predetermined prices. This system is particularly important for SME (Small and Medium-sized Enterprises) IPOs, where market makers play a crucial role in ensuring that there is enough trading activity and stability in the stock's price. (Market Maker Shares Offered: 304,000 (5.07%) ).

  • QIB Shares Offered: QIBs are institutional investors such as banks, mutual funds, insurance companies, pension funds, etc., who have the expertise and financial resources to invest in the securities market. They are considered as informed and sophisticated investors who can assess the risks and returns of an IPO. QIBs can bid for up to 50% of the total shares offered in an IPO via the profitability route, or up to 75% of the total shares offered in an IPO via the QIB route. QIBs have to pay only 10% of the bid amount at the time of application, and the rest after the finalization of the basis of allotment. (QIB Shares Offered: 1,144,000 (19.07%)).

  • NII (HNI) Shares Offered: NII stands for Non-Institutional Investors, which includes High Net-worth Individuals (HNIs) who bid for shares worth more than ₹200,000. The NII category is reserved for investors who do not fall under the retail or Qualified Institutional Buyers (QIBs) categories. Typically, a certain percentage of the IPO, usually around 15%, is allocated for NIIs to ensure a wider distribution of shares. HNIs within the NII category often have a higher chance of allotment compared to retail investors, making it an attractive option for those looking to invest larger sums in an IPO. (NII (HNI) Shares Offered: 856,000 (14.27%) ).

Competitors of Refractory Shapes Limited

Refractory Shapes Limited (RSL) manufactures various refractory products like bricks, castables, and ceramic balls. Understanding their competitor landscape is crucial for their future prospects. Here's a breakdown of the key players RSL is likely to encounter:

Major Competitors:

Established Players:

SP Refractories Limited: A leading player in the Indian refractory market with a wider product range and larger scale compared to RSL.

IFGL Refractories Limited: Another major competitor known for its strong performance across various metrics, potentially putting pressure on RSL's pricing and market share.

Other Competitors:

Regional Players: Several regional players might compete with RSL in specific markets or product categories. These companies may have a strong presence in localized areas or cater to niche segments within the refractory industry.

Imported Refractory Products: Depending on the product type and application, imported refractories from countries like China or Europe could pose a challenge, especially for cost-sensitive customers.

Competitive Advantages for RSL:

Focus on Specific Products: RSL's specialization in certain refractory products like high alumina catalysts and ceramic balls could allow them to carve out a niche market and potentially command premium pricing.

Quality Certifications: Certifications like ISO 9001:2015 (Quality Management), 14001:2015 (Environmental Management), and 45001:2018 (Occupational Health & Safety) can enhance RSL's reputation and attract quality-conscious clients.


In conclusion, the IPO of Refractory Shapes Limited presents a unique opportunity for investors seeking to engage with the refractory sector. Despite the competitive and fragmented nature of the industry, and the company's inconsistent bottom lines in past reports, the IPO is priced on the basis of FY24 annualized super earnings. Investors with a deep understanding of the market may find value in considering a moderate investment, with a view towards medium to long-term gains. The company's strategic focus on diversifying its product range and its plans to expand and upgrade its manufacturing capabilities could be pivotal in its growth trajectory. As always, potential investors should conduct thorough due diligence and consider their investment goals and risk tolerance before participating in the IPO.

Please Read the Detailed Review Here.

Disclaimer: This is not an investment advisory. The article above is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing securities, that suit your needs. The performance and returns of any equity stock can neither be predicted nor guaranteed.


Q: What is an IPO?

An Initial Public Offering (IPO) is a process through which a privately held company offers its shares to the public for the first time and becomes a publicly traded company.


Q: How can I apply for an IPO?

You can apply for an IPO through various methods:

ASBA (Application Supported by Blocked Amount): In this method, your application money remains in your bank account until the basis of allotment is finalized.

UPI (Unified Payment Interface): You can authorize the blocking of funds in your bank account using UPI while applying for an IPO.

Q: What is ASBA?

ASBA stands for Application Supported by Blocked Amount. It allows your application money to be blocked in your bank account during the IPO bidding process. You continue to receive interest on the blocked amount.

Q: What is the difference between book building and a normal public issue?

Book building is a process where demand for securities is elicited and the price is assessed based on investor bids. In a normal public issue, the price is fixed by the issuer.

Q: Can I make payments through UPI for IPOs?

Yes, you can use UPI as a payment method for IPOs. The UPI platform blocks the funds for IPO applications after you approve the fund block mandate request.

Q: What is the minimum order quantity for an IPO?

The minimum number of shares you can apply for in an IPO is known as the minimum order quantity. It varies for each IPO.

Q: What is the cut-off price in an IPO?

The cut-off price is the price at which you bid for shares without specifying a particular price. It allows you to participate in the IPO without specifying a specific bid price.

Q: Can I revise my bids during the IPO process?

Yes, you can revise your bids multiple times before the IPO bidding period ends.

Q: Which banks offer the ASBA facility for IPOs?

Several banks, known as Self Certified Syndicate Banks (SCSBs), offer the ASBA facility. Some examples include HDFC Bank, ICICI Bank, Axis Bank, and SBI.

Q: How do I find IPO mandates on UPI apps?

You can check the list of UPI handles supported for IPO payments on the National Payments Corporation of India (NPCI) website. These handles allow you to apply for IPOs using UPI.

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