Rolex Rings IPO allotment status and capital gain tax on selling shares in IPO allotment

Incorporated in 2003, Rolex Rings is among the top five forging companies in India. The company manufactures hot rolled forged & machine bearing rings and automotive components that are used across segments i.e. passenger vehicles, 2-wheelers, commercial vehicles, electric vehicles, off-highway vehicles, industrial machinery, wind turbines, railways, etc. A wide range of product offerings such as automotive parts, hot forged and machined alloy steel bearing rings weighing from 0.01 Kg to 163+ kg caters to different industries i.e. automotive, industrial infrastructure, railways, renewable energy, etc.

The company supplies its products on both the domestic as well as international ground to automotive companies and leading bearing manufacturers such as SRF India, Schaeffler India, Timken India, etc. In fiscal 2020, it has exported bearing rings and automotive components to 17 different countries i.e. France, Italy, Germany, Thailand, Czech Republic, USA, and others.

Company Financials:

Summary of financial Information (Restated Consolidated)
Particulars	For the year/period ended (₹ in million)
	31-Mar-21	31-Mar-20	31-Mar-19
Total Assets	7,969.24	6,861.73	7,822.57
Total Revenue	6,197.57	6,753.32	9,112.54
Profit After Tax	869.55	529.41	590.41

Objects of the Issue:

Funding long-term working capital requirements.
General corporate purposes.

Rolex Rings IPO Subscription Status (Bidding Detail)

The Rolex Rings IPO is subscribed 130.44x times on Jul 30, 2021 17:01. The public issue subscribed 24.49x in the retail category, 143.58x in the QIB category, and 360.11x in the NII category.

Category	IPO Subscription
QIB	143.58x
NII	360.11x
RII	24.49x
Total	130.44x

The listing date for IPO is 09.08.2021.

Check Allotment Status on Registrar’s Website

The registrar for this IPO is Link Intime India Private Limited.

The registrar for the IPO is Link Intime India Private Limited and the shares are proposed to be listed on the BSE and NSE.
After you land on the website’s homepage, click on public issues. You will see a drop-down that says ‘Select Company’.

From the drop-down menu, select ‘Rolex Rings’.
For identification, you can give your PAN number, application number, DP/client ID, account number/IFSC code.

Check Allotment Status on BSE

Step 1: Investors are required to follow this link to check their IPO allotment status on BSE: https://www.bseindia.com/investors/appli_check.aspx.

Step 2: You will then have to select the ‘Equity’ option and then from the dropdown, select issue name – ‘Rolex Rings’

Step 3: You will have to enter your application number and PAN card number next.

Step 4: After completing all the above-mentioned steps click on the “Search” button.

Capital gain tax on sale of shares received in IPO allotment:

Now, let’s talk about the taxability of gain earned if the shares are sold on the listing date itself to get listing gain by way of premium on listing and if the same is sold after some time.

There can be two types of gain’s: (i) long term or (ii) short term.

Since the shares are going to be listed on stock exchange hence, if the shareholder sell such shares on the recognised stock exchange, such shares will be considered as long term asset if they are held for more than one year and will be considered as short term if they are held for a period less than 1 year.

The taxability of such shares will be calculated based on section “111A for short term gain” and “112A for long term gain” wherein tax rate of short term gain is 15% of the gain and for long term gain the tax rate is 10% of the gain amount.

Looking at the current scenario we know that many people sell their shares on the listing day itself to earn the listing premium and hence the gain earned by such transaction will be considered as short term capital gain as the assessee held shares for less than one year period and hence he/ she shall be liable to pay tax at the rate of 15% on such gain under section 111A of the Income tax Act.

However if the shareholder holds the share for more than one year from the date of listing as the specialty chemical sector is likely to see boom in next year then he or she shall be liable to pay tax at the rate of 10% on the gain amount under section 112A of the Income tax Act.

Further, for long term capital gain no tax needs to be paid on the initial Rs. 1 lakh gain u/s 112A of the Income tax Act and no benefit of indexation will be available in case of long term gain since the shares are listed and sold on recognized stock exchange.

In case of long term capital gain one can claim exemption u/s 54F by investing the entire sale consideration in a new residential house and if the conditions mentioned under section 54F are fulfilled, other than section 54F there are no other way to save capital gain tax.

Also, the tax rates mentioned above are just base rates and surcharge and cess will also be added accordingly on such tax rates.

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