Is Royal Arc Electrodes Ltd. IPO Halal or Not? If you’re looking for a detailed Shariah compliance analysis, you’re in the right place! In this article, we break down whether Royal Arc Electrodes Ltd. meets Shariah Screening guidelines.
Is Royal Arc Electrodes Ltd. IPO Halal or Not?
Royal Arc Electrodes Ltd., a company in the welding equipment sector, has undergone a Shariah compliance screening based on key financial and business criteria. Based on the financial information available to the public, Royal Arc Electrodes Ltd. appears to be Halal and Shariah Compliant. (Allah Knows the Best)
Overview of Royal Arc Electrodes Ltd. IPO
- Company Name: Royal Arc Electrodes Ltd.
- IPO Open Date: February 14
- IPO Close Date: February 18
- Listing Date: February 21
- Price Band: ₹114 to ₹120 per share
- Lot Size: 1200 Shares
- Issue Size: ₹36 Cr
- Issue Type: Book Built Issue
- Exchange Listing: NSE SME
Business Overview of Royal Arc Electrodes Ltd.
Established in 1996, Royal Arc Electrodes Limited specializes in manufacturing welding consumables, including welding electrodes, flux-cored wires, and MIG/TIG wires.
The company’s welding consumables are widely used in various industries such as railways, roadways, airports, refineries, shipyards, mining, sugar, telecom, thermal power plants, and pre-engineered buildings (PEB). These products play a crucial role in welding tanks, boilers, heavy structures, beams, pipes, cylinders, and pressure vessels.
In addition to manufacturing, Royal Arc Electrodes Limited is also engaged in trading related products, including wheels, electro slag, flux-cored welding wire, electro slag strip cladding, saw flux, and TIG/MIG wires.
The company operates a modern manufacturing facility covering 269,198 sq. ft. in Zaroli, Umbergaon, Gujarat. It utilizes materials such as copper-coated wire, mild steel (MS) strips and wire, stainless steel (SS) strips and wire, nickel wire, and ferro alloy powder to produce high-quality welding consumables.
Royal Arc Electrodes offers both standardized and customized products, catering to domestic and international markets, exporting to over 20 countries. Its products hold certifications from the American Bureau of Shipping (ABS), Indian Boilers Regulation (IBR), and the Bureau of Indian Standards (BIS), with quality inspections conducted by NABL-accredited laboratories.
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Shariah Compliance Analysis of Royal Arc Electrodes Ltd.
Shariah Compliant / Halal
| Criteria | Value | Status |
| Business Activity | welding equipment | ✅ PASS |
| Impermissible Income to Total Revenue | 0.36% | ✅ PASS |
| Interest-Bearing Debt to Total Assets | 3.64% | ✅ PASS |
| Illiquid Assets to Total Assets Ratio | 54.2% | ✅ PASS |
| Net Liquid Assets vs Market Capitalization | Compliant as per Shariah principles | ✅ PASS |
| Non-Compliant Investments to Total Assets | Less than 33% (Compliant) | ✅ PASS |
Conclusion
Based on the screening criteria, Royal Arc Electrodes Ltd. appears to be Halal and Shariah Compliant (Allah Knows the Best) as it meets all major shariah screening guidelines. However, investors should conduct their own due diligence and review the company’s financials periodically for any changes in compliance.
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Hasan is the founder of HalalFinance.co.in, created after personally struggling to find reliable answers about halal investing in stocks. With a finance background and a passion for helping the Muslim community, He now shares well-researched, transparent, and authentic content to empower Muslims on their path to halal wealth-building.