The much-anticipated Unimech Aerospace and Manufacturing IPO is set to debut on Dalal Street on December 31, 2024. Known for its expertise in complex aerospace tools, Unimech has garnered substantial interest from investors, though market volatility has tempered expectations for explosive listing gains.
Key IPO Details
- Issue Price Band: ₹745-785 per share
- Lot Size: Minimum application of 19 shares and multiples thereafter
- IPO Dates: December 23-26, 2024
- Issue Size: ₹500 crore
- Fresh issue: ₹250 crore
- Offer-for-sale (OFS): ₹250 crore
Grey Market Premium (GMP): Despite initial optimism, the GMP dropped from ₹715 to ₹625 amid volatile market conditions, suggesting potential listing gains of around 80%.
Business Overview
Founded in 2016 and headquartered in Bengaluru, Unimech Aerospace and Manufacturing specializes in manufacturing complex mechanical assemblies, electro-mechanical systems, and components for aeroengine and airframe production. The company caters to the aerospace sector with high-precision engineering and a focus on quality.
- Core Products:
- Mechanical assemblies
- Electro-mechanical systems
- Aeroengine and airframe components
Unimech’s innovative approach and focus on complex product manufacturing have established its reputation in the aerospace industry, both domestically and internationally.
Subscription Highlights
The IPO received an overwhelming response, with the issue being subscribed 175.31 times overall.
| Investor Category | Subscription Times |
|---|---|
| Qualified Institutional Buyers (QIBs) | 317.63x |
| Non-Institutional Investors (NIIs) | 263.78x |
| Retail Investors | 56.87x |
| Employees | 97.81x |
This robust demand underscores the strong investor confidence in Unimech Aerospace’s growth potential and industry positioning.
Financial Performance
The company’s solid financial footing has further fueled investor interest.
| Metric | FY24 | FY23 |
|---|---|---|
| Revenue | ₹450 crore | ₹380 crore |
| Net Profit | ₹65 crore | ₹50 crore |
| EBITDA Margin | 28% | 25% |
Unimech’s consistent growth in revenue and profitability highlights its operational efficiency and ability to meet the rising demand for aerospace components.
Brokerage Insights
Brokerage firms have expressed optimism about the IPO, emphasizing its growth potential and robust business model.
Anand Rathi Securities
- Recommendation: Subscribe
- Insight: A strong player in a niche market with promising growth avenues and operational excellence.
Equirus Capital
- Recommendation: Subscribe
- Insight: High subscription figures and a solid financial profile make it an attractive long-term investment.
Listing Expectations
While initial excitement around Unimech Aerospace suggested multibagger returns, the recent decline in GMP reflects market caution. However, listing gains of approximately 80% remain achievable, making this a lucrative opportunity for both short-term and long-term investors.
Should You Invest?
Pros:
- Strong market demand and robust subscription figures
- Niche expertise in aerospace manufacturing
- Consistent financial performance and growth potential
Cons:
- Volatile market conditions may impact short-term gains
- High valuations compared to peers
Unimech Aerospace is well-positioned for long-term growth, but investors should manage expectations for immediate multibagger returns.
Disclaimer
This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult financial advisors before making any investment decisions.
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