The much-awaited Unimech Aerospace IPO has opened for subscription, providing investors with an opportunity to tap into the aerospace and defense manufacturing sector. The Bengaluru-based company is offering shares in the price range of ₹745-₹785 apiece. Let’s dive into the key details of this ₹500-crore public offering and assess whether it deserves a spot in your portfolio.
Key Data
| Particulars | Details |
|---|---|
| IPO Name | Unimech Aerospace IPO |
| Issue Size | ₹500 crore |
| Price Band | ₹745-₹785 per share |
| Minimum Lot Size | 19 shares and multiples thereof |
| Subscription Period | December 23-26, 2024 |
| Fresh Issue | ₹250 crore |
| Offer for Sale (OFS) | ₹250 crore (31.82 lakh equity shares) |
| Anchor Investment | ₹149.5 crore from domestic and global institutional investors |
| Listing Date | December 31, 2024 |
| Book Running Lead Managers | Anand Rathi Securities, Equirus Capital |
| Registrar | Kfin Technologies |
Unimech Aerospace: Business Overview
Founded in 2016, Unimech Aerospace specializes in manufacturing complex components for the aerospace, defense, and semiconductor industries. Its capabilities include machining, fabrication, and assembly of high-precision tools and systems.
- Key Customers: The company caters to over 26 clients across seven countries, including the USA and Europe.
- Production Facilities: Unimech operates two state-of-the-art manufacturing units in Bengaluru, spanning over 120,000 square feet.
IPO Objectives
The proceeds from this IPO will be allocated for:
- Purchasing advanced machinery and equipment.
- Meeting working capital requirements.
- Repayment/prepayment of certain borrowings.
- General corporate purposes.
Anchor Investors and Market Sentiment
Unimech has raised ₹149.5 crore from anchor investors, including prominent names like Goldman Sachs, Clarus Capital, and Ashoka India Equity Investment Trust. This indicates strong institutional confidence in the company’s growth prospects.
Brokerage Recommendations
InCred Equities: Subscribe
- Highlighted Unimech’s robust financial growth with a CAGR of 79% in revenue and 158% in profit over FY22-FY24.
- Noted its high-margin, high-complexity business model as a key advantage.
SBI Securities: Subscribe
- Pointed out the company’s potential to capitalize on aerospace and defense sector growth.
- Praised its expansion strategy and competitive pricing.
Canara Bank Securities: Subscribe
- Emphasized the global demand for precision-engineered aerospace components.
- Valued the company’s competitive pricing and long-term growth trajectory.
Financial Performance
Unimech’s financials reflect strong growth:
- Revenue CAGR: 79% (FY22-FY24)
- EBITDA Margin: Expanded from 21.3% in FY22 to 37.9% in FY24.
- Return on Equity (RoE): 54% in FY24.
Pros and Risks
Pros:
- Diversified product portfolio and client base.
- Robust financials with high margins and growth potential.
- Strong market position in the aerospace and defense sector.
Risks:
- Dependence on a niche market with high competition.
- Exposure to geopolitical and regulatory risks in export markets.
FAQs
What is the price range of the Unimech Aerospace IPO?
The shares are priced between ₹745 and ₹785 per share.
What is the IPO size, and how is it split?
The total size is ₹500 crore, with ₹250 crore as fresh equity and ₹250 crore as an offer for sale (OFS).
When will the shares be listed?
The shares will be listed on December 31, 2024.
What are the key business areas of Unimech Aerospace?
Unimech focuses on manufacturing high-precision components for the aerospace, defense, energy, and semiconductor industries.
Should I subscribe to the Unimech Aerospace IPO?
Brokerage firms have unanimously rated this IPO as a “Subscribe” due to its growth prospects, high margins, and competitive valuation compared to peers.
Conclusion
Unimech Aerospace’s IPO presents a compelling opportunity for investors seeking exposure to the aerospace and defense sector. With strong financial growth, a well-diversified portfolio, and favorable industry tailwinds, the company is well-positioned for long-term success.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Investors are encouraged to consult their financial advisors before making investment decisions.
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