Riddhi Display Equipments IPO Analysis

Displays don’t just show products; they shape perception. Here is a company transforming retail environments—bringing smart, modern display solutions closer to India’s growing consumer brands.

Let’s explore this commercial equipment maker, Riddhi Display Equipment, further:

The Ridhi Display Equipments Share Price will be finalised post-allotment, while grey market cues through the Ridhi Display Equipments IPO GMP will likely reflect market sentiment closer to listing.

The company comes under the category of the Capital goods industry. The industry contributes 12% of India’s manufacturing output and 1.8% of GDP. The market size of this industry was valued at USD 43.2 billion in FY22. 

Looking forward, the total market share in India is projected to increase substantially, moving from USD52.98 billion in 2022 to USD 125 billion by 2027, reflecting a CAGR of 11.68%. 

Key segments within the Capital Goods sector include Machine tools, Process plant machinery, and Electrical machinery. The domestic electrical equipment market is a notable growth area, anticipated to grow at an annual rate of 12% to reach USD 72 billion by 2025. 

Riddhi’s Business Overview

Incorporated in 2006, the company operates under three verticals: Display Counters, which include customised refrigerated, heated, and ambient options for items like sweets, bakery goods, and fast food. Commercial Kitchen Equipment, such as cooking ranges, work tables, and trolleys. And the third one of Commercial Refrigeration Equipment, supplied to various entities like restaurants, food courts, and ice cream parlours. 

Core operation centred at its Registered Office cum Manufacturing Unit located in Rajkot, Gujarat. The company serves a diverse client base across India, with the Gujarat region contributing substantially to domestic revenue, and maintains an emerging international presence with exports to geographies including the USA, Dubai, Nepal, and Australia. 

Business Model

Let us know in brief how our company conduct its business:

1. Order Generation: Orders are sourced by the sales and marketing team as per the requirements of designs and layout. 

2. Design and Job Card Creation: A Job Card is prepared detailing customer needs, design preferences, and specifications. Drawing and blueprints are then created. 

3. Raw Material Procurement: Purchase Orders are placed with suppliers, and incoming materials undergo strict inspection for quality and technical conformity.

4. Manufacturing: Production involves shaping raw materials using machinery like Laser Cutting and CNC Machines, followed by bending and welding.

5. Final Quality Check and Dispatch: The finished product undergoes a final QC for safety. Once approved, the item is packaged and dispatched.

The company maintains an installed manufacturing capacity of 576 MT annually for display equipment and related products. Utilisation has remained strong and stable.

Capacity utilisation has steadily improved from 71% in FY22 to 79% in Oct-24, reflecting better operational efficiency and stronger demand absorption.

The gap between installed capacity and actual utilisation is narrowing, showing the company is using its existing capacity more effectively.

About The Management & Governance

Primarily promoted by Mr Shaileshbhai Ratibhai and Mrs Hansaben Pipaliyag, with more than 5 decades of combined experience in the kitchen display industry, the management has extensive prior sector knowledge.

While 3 out of 6 board members are independent directors, the governance ensures quality as the audit and remuneration committees are led by independent directors.

Since Riddhi Display was formed in 2006, the company has successfully built long-standing relationships with a diverse customer base across various sectors, including dairy, hospitality, food processing, and retail. 

With promoter’s shareholding at around 99.99% pre-IPO to 71.43% post-IPO. The management showcases a strong execution and scaling capability.

Financial Performance 

Revenue steady, profits surged: The company has given 150% revenue growth as per the H1FY25 numbers. While the Net profit of H1 has already surpassed FY24.

Margins expanded strongly: EBITDA margin climbed from 5% to 26%, showing major efficiency gains and better product mix.

Balance sheet strengthened: Debt-equity reduced from 5.9x to 1x, lowering financial risk considerably.

Liquidity remains strong: Current ratio remains steady at around 1.3x, indicating healthy working-capital management.

Returns sharply improved — ROE/ROCE spiked to 44–46%, reflecting improved profitability, but may moderate as growth normalises.

Overall, the company has executed a clear financial turnaround, driven more by margin improvement than topline growth.

Riddhi’s margins and returns are much stronger than ICE Make and only slightly behind Safe, so operationally it looks like a solid, efficient business.

Despite this, its P/E is far lower than both peers, hinting that investors are not yet valuing Riddhi’s performance as generously.

Debt is moderate (higher than Safe, lower than ICE Make). The company basically has good returns with some leverage.

IPO Objectives

• Capex Expansion: Funding expenditure required to increase its plant and machinery base.

• Working Capital: Maintaining inventory and debtors for sales & business expansion.

• General Corporate Purpose: Required for administrative and operational-related expenses. 

Overall, the company aims to raise funds to expand its production and inventory base. The management targets to increase its product sales & outreach and anticipates higher demand. It can be said that the money is being used for the company’s primary purpose of manufacturing and selling its display counters and store-related furniture.

Strength and Risk

At Alpha Venture X Fund, we assess opportunities through our LMVT framework — Leadership, Moat, Valuation, and Tailwinds — enabling us to identify scalable businesses with durable fundamentals. 

Leadership: Promoters have deep on-ground and 50+ years of combined experience in commercial refrigeration and display systems; execution has been consistent.

Moat: Strong in-house manufacturing, customised and wide product portfolio in kitchen equipments, and long-standing relationships with HoReCa clients give reliability-based stickiness. 

Tailwinds: Growth in QSR chains, café formats, cloud kitchens, and modern retail continues to expand demand for display counters and cold-chain equipment. 

Valuation: Along with ROE & ROCE, margins have expanded sharply in recent years. Though the company falls in a fair valuation range, the revenue and PAT have given substantial growth.

Bottom line: Company is growing fast with improving fundamentals and industrial support. The growth, however, hinges on scaling capacity. Maintaining high margins and being competitive in the unorganised sector will be challenging for the company. This is a selective, not automatic, buy.