Global energy efficiency solutions company Rishabh Instruments has received the nod from capital markets regulator Sebi to raise funds through an initial public offering (IPO).

According to the draft Red Herring Prospectus (DRHP), the IPO includes a new issue of shares totalling up to Rs 75 crore and offers for sale (OFS) of up to 94.17 lakh shares from promoter group shareholders and existing investors.

According to OFS, Asha Narendra Goliya will sell 2.5 million shares, Narendra Rishabh Goliya (HUF) will sell 517,000 shares, Rishabh Narendra Goliya will sell 400,000 shares, and SACEF Holdings II will sell 60 lakh equity shares.

The company filed draft documents with the Securities and Exchange Board of India (Sebi) in December 2022 and received the observation letter on February 17, 2023, an update from the regulator on Tuesday showed.

In Sebi’s words, its observations mean it will go ahead with the IPO.

According to the draft document, the company may explore a pre-IPO placement totalling Rs 150 crore. In the event of such a placement, the size of the new issue would be reduced.

Proceeds from the offering worth Rs 59.50 crore will be used to finance the expansion of its manufacturing plant in Nashik and for general corporate purposes.

The Nashik-based company specialises in electrical automation, metering and measurement, and precision engineering products with various applications across industries, including power, automotive and other industrial sectors.

It is one of the leading companies in manufacturing and supplying Low Voltage Current Transformers and Analog Panel Meters.

The company’s equity shares are to be listed in BSE and NSE.

DAM Capital Advisors, Mirae Asset Capital Markets (India) and Motilal Oswal Investment Advisors Ltd are the book-running managers for the offering.

The company posted a net profit of Rs 49.65 crore in the financial year ending March 2022, while its operating income rose to Rs 470.25 crore in FY22 from Rs 389.96 crore in the previous fiscal.