Unimech Aerospace IPO: Check GMP, Review, Price & Date

Would you be interested in investing in a company that is putting India on the global map in the aerospace and defence sector? Unimech Aerospace and Manufacturing Limited, which has supplied 2,356 complex products and precision parts to customers in 7 countries, is now set to begin a new chapter with its IPO. With its high-tech manufacturing units in Bangalore and strong management, this company could present a significant opportunity for investors.

So, let’s dive deep to explore the key aspects of the Unimech Aerospace IPO, its potential and what makes it an exciting investment opportunity for both seasoned and new investors.

Also Read: The Psychology of Money: Key to Stock Market Success

Unimech Aerospace IPO Details

The Unimech Aerospace IPO is a book-built issue worth ₹500 crore, comprising both a fresh issue of 0.32 crore new shares of ₹250 crore and an offer for sale (OFS) of 0.32 crore existing shares of ₹250 crore. This dual structure allows the company to raise capital through the issuance of fresh equity while providing an opportunity for existing shareholders to monetize their holdings.

Unimech Aerospace’s ₹500 crore IPO opens for subscription on Monday, December 23, 2024 and will close on Thursday, December 26, 2024. The allotment for Unimech Aerospace IPO is expected to be finalized on Friday, December 27, 2024 with a tentative listing date on the stock exchanges set for Tuesday, December 31, 2024. The price band of Unimech Aerospace shares has been fixed at ₹745 to ₹785 per share.

For detailed information, you can refer to Unimech Aerospace and Manufacturing IPO RHP.

Unimech Aerospace IPO GMP

Prior to its opening, the IPO has received a positive response in the unlisted market, where it is currently trading at a premium of approximately 51%. The latest GMP of Unimech Aerospace IPO stands at ₹406, indicating an estimated listing price of ₹1191.

Check IPO Live GMP: View now for Real-Time Updates

Unimech Aerospace IPO Lot Size

Unimech Aerospace and Manufacturing Limited has issued 63,69,424 shares worth ₹500 crore consisting of both a fresh and an offer for sale issue. The minimum lot size for an application is 1 lot (19 shares) and the minimum amount of investment required by retail investors is ₹14,915.

The minimum lot size investment for s-HNI (Small High Net Worth Individual) is 14 lots (266 shares), amounting to ₹2,08,810, while the maximum is 67 lots (1,273 shares), amounting to ₹9,99,305.

For b-HNI (Big High Net Worth Individual), the minimum lot size is 68 lots (1,292 shares) amounting to ₹10,14,220.

Unimech Aerospace IPO Reservation Details

Below are the limits for the shares offered in the different investor categories for this IPO:

Category Reservation Details

Unimech Aerospace IPO Anchor Investors Details

On December 20, 2024, Unimech Aerospace secured ₹149.55 crore from anchor investors. Here are some additional details:

About the Company

Next, let’s shift our focus to explore more about the company’s background, operations, strengths and risks, financial statements and key highlights.

Incorporated in 2016, Unimech Aerospace and Manufacturing Limited is engaged in the manufacturing of complex tools and systems like mechanical assemblies, electro-mechanical systems and components for aeroengine and airframe production.

The company’s key products include:

• Aero Engine Tooling: Engine lifting and balancing beams, oil tube alignment fixtures, radial centering support and more.

• Airframe Tooling: Lateral spar assemblies, drill jigs and airframe assembly platforms.

• Precision Parts: Missile components.

• Precision Sub-Systems: Rocker arm (HMC CDA).

The company is an engineering solutions provider specializing in the manufacturing of complex products with “build to print” and “build to specifications” offerings. This involves machining, fabrication, assembly, testing and creating new products based on the specific requirements of clients in the aerospace, defence, energy and semiconductor industries.

Manufacturing Facilities:

The company has two ISO-certified state-of-the-art production units in Bangalore covering a total area of over 1,20,000 sq ft:

• Unit I: Located in Peenya, spanning 30,000 square feet.
• Unit II: Situated in a Special Economic Zone near the Bangalore Airport, covering 90,000 square feet.

Between 2022 and 2024, the company produced 2,356 SKUs in the tooling and precision complex sub-assemblies category, serving over 26 customers across 7 countries. As of March 31, 2024, the company has a workforce of 384 employees.

Competitive Strengths:

• Advanced manufacturing capabilities capable of delivering high-precision engineering solutions.

• Established player with unique capabilities in a sector with high barriers to entry

• Export-driven player with a global delivery service model

• Robust vendor ecosystem and strong sub-contractor management with proven execution capabilities

• Experienced and complementary management team with strong implementation skills and operational effectiveness

Unimech Aerospace IPO Objectives (Objects of the Issue)

The company plans to allocate the net proceeds from the fresh issue for the following purposes:

• Funding of capital expenditure for expansion through the purchase of machinery and equipment by the company.

• Funding the working capital requirements of the company.

• Investment in the material subsidiary for:
  
  (i) purchase of machinery and equipment.
  (ii) funding its working capital requirements.
  (iii) repayment/prepayment in full or part of certain borrowings availed by their material subsidiary.

• General corporate purposes.

The company will not receive any proceeds from the offer for sale by the selling shareholders and the proceeds from the offer for sale will not form part of the net proceeds.

Also Read: Trading Economics: How Economic Events Impact Stock Market?

Unimech Aerospace and Manufacturing Limited Financial Information (Restated Consolidated)

The revenue of Unimech Aerospace and Manufacturing Limited increased by 125% and profit after tax (PAT) rose by 155% in the FY2023-24 (April 1, 2023 to March 31, 2024).

Key Performance Indicators

The current market capitalization of Unimech Aerospace is ₹3992.27 crore. As of March 31, 2024, the company’s key performance indicators (KPIs) include an impressive Return on Capital Employed (ROCE) of 54.36%, Return on Net Worth (RoNW) of 53.53% and profit after tax (PAT) margin of 27.85%.

The EPS and PE ratios before and after the Unimech Aerospace IPO issue are detailed in the list below:

• The Pre-IPO EPS is calculated based on the pre-issue shareholding as of the RHP date and the latest FY earnings available in the RHP, as of March 31, 2024.

• The Post-IPO EPS is calculated based on the post-issue shareholding and annualized FY earnings as of September 30, 2024, as provided in the RHP.

Also Read: Stock Analysis: Things to Follow & Avoid in the Stock Market

Unimech Aerospace IPO Review (Apply)

The review of the Unimech Aerospace IPO has been done based on the following points:

1. Revenue Growth: Revenue increased nearly sixfold, rising from ₹37.08 crore in FY22 to ₹213.79 crore in FY24 (476% growth), with Q1 FY25 already at ₹127.58 crore. This reflects steady growth and a strong market presence.

2. Profit Growth: PAT grew significantly from ₹3.39 crore in FY22 to ₹58.13 crore in FY24 (260% growth), with Q1 FY25 contributing ₹38.68 crore. With a PAT margin of 27.85%, the company demonstrates good profitability, which is extremely good for the defence sector.

3. Valuation Metrics: Pre-IPO P/E: 64.37 | Post-IPO P/E: 51.61
   
   As per the RHP, the company has shown MTAR Technologies Limited, Azad Engineering Limited, Paras Defence and Space Technologies Limited and Dynamatic Technologies Limited as their listed peers. They are trading at the P/E of 136, 141, 95.8 and 111 (as of December 21, 2024) respectively. When compared to its peers, the IPO appears undervalued. Additionally, with the average P/E ratio of the defence sector around 82x, the company’s valuation at this P/E ratio seems reasonable.

4. Return on Capital Employed (ROCE) and Return on Net Worth (RoNW):
   
   ROCE: 54.36% reflects the company’s capital efficiency.
   
   RoNW: 53.53% is extremely good for long-term investors.

5. GMP and IPO Price Band: With a price band of ₹745 to ₹785 per share and a GMP of ₹406, the market shows a great interest, suggesting a potential listing gain of around 51%.

Strengths

• Strategic Manufacturing Facilities: Advanced manufacturing capabilities with high-precision engineering solutions.

• Fabrication Capabilities: Fabrication capabilities cover engineering fabrication up to 2 metres and structural fabrication up to 6 metres, performed by AWS and ASME-certified welders. The company also offers special processes such as painting, polymer-based coatings, and NADCAP-certified processes like heat treatment and anodising through third-party vendors.

• Assembly Expertise: Assembly expertise includes various types of assemblies, such as interference and transition fits, heli-coil assemblies, smooth sealing applications, and capacities of up to 3,000 components in a single assembly. Additional capabilities include laser tracker calibration, load testing up to 70 tonnes, pressure testing up to 420 bars, balancing to within 1 gram, helium leak detection, and non-destructive testing methods such as ultrasonic, die-penetrant, magnetic particle, fluorescent penetration, and drive mechanism testing.

• Financial Performance: The company has seen a consistent increase in revenue from operations and profit after tax (PAT). Revenue from operations increased from ₹36.35 crore in FY22 to ₹94.17 crore in FY23 to ₹208.77 crore in FY24. PAT increased from ₹3.39 crore in FY22 to ₹22.81 crore in FY23 to ₹58.13 crore in FY24 while maintaining a healthy PAT margin of 27.85% which exhibits strong financial health and prudent management.

• Digital Focus: Digital-first manufacturing company with a robust infrastructure facilitating seamless integration of operations.

• Global Presence & Track Record:  Their established strong global presence with clients in the US, Germany, and the UK and exports to 7 countries demonstrates strong global market penetration and proven execution capabilities.

• Experienced Management: Experienced management team with proven operational and implementation skills.

Risks

While Unimech Aerospace presents a compelling investment case, potential investors should consider certain risks. Here are some of the risk factors involved in the IPO that investors should know before subscribing to the issue:

• High Dependence on Aerospace and Defence Limiting Diversification: A substantial portion of the company’s revenue comes from the aerospace sector, specifically from manufacturing aero-engine tooling and airframe tooling. The sector contributed ₹118.54 crore (98.25%) for the six months ending September 30, 2024, ₹34.84 crore (95.84%), ₹89.18 crore (94.70%) and ₹207.41 crore (99.35%) to the revenue from operations in FY22, FY23 and FY24 respectively. Any adverse developments in this sector could negatively affect the company’s business operations and financial condition.

• High Dependence on Exports: Unimech’s business is dependent on exports, which accounted for 95.67% of total revenue for the six months ending September 30, 2024, 91.06%, 95.20% and 97.64% in FY22, FY23 and FY24 respectively. The United States alone contributed ₹99.60 crore (82.55%) for the six months ending September 30, 2024, ₹27.76 crore (76.38%), ₹72.42 crore (76.91%) and ₹192.46 crore (92.19%) in FY22, FY23 and FY24 respectively. Any adverse developments or changes in these export markets, particularly the USA and Germany, could adversely impact operations and finances.

• High Dependence on Third-Party: The company relies on third-party suppliers for raw materials without long-term contracts or exclusive agreements. This exposes it to risks of supply chain disruptions and price volatility, which could affect production, order fulfillment and profitability. Additionally, advances paid to suppliers may not always be recoverable, further increasing financial risks.

• Revenue Dependent on few Customers: The company’s top 10 customers contributed ₹119.56 crore (99.09%) for the six months ending September 30, 2024, ₹35.14 crore (96.67%), ₹92.38 crore (98.11%) and ₹207.62 crore (99.45%) to the revenue from operations in FY22, FY23 and FY24 respectively. Any loss of any of these major customers or a decline in purchases from them could adversely affect the company’s operations and finances.

All the above-mentioned risks should be considered by investors before deciding to invest in the IPO.

Opinion

Given the company’s financial growth, strong fundamentals and high listing gain potential, the IPO appears attractive and therefore can be applied for both listing gains and investment. You can go through the points mentioned below to plan accordingly:

• Long-Term Investors: Based on the company’s performance to date, the issue seems undervalued. So, investors might consider holding their investments for the long term.

• Short-Term Investors: Short-term traders or investors should pay attention to the GMP trend on the listing day for any short-term gains, which look really good as of now with a 51% return on the listing date.

The Government of India is placing significant emphasis on the defence sector. If you are confident in the sector’s growth potential and the company’s ability to sustain its performance, you may want to consider applying for the IPO for both listing gains and long-term investment.

Also Read: 10 Trading Rules That Make a Trader Successful

Additional Details

Promoter Holding

Mr. Anil Kumar P, Mr. Ramakrishna Kamojhala, Mr. Mani P, Mr. Rajanikanth Balaraman and Mr. Preetham SV are the promoters of the company. Their shareholding before and after the issue is as follows:

Unimech Aerospace IPO Allotment Status: Check Now

Unimech Aerospace & Manufacturing Limited Contact Details

Address: 538, 539, 542 & 543, 7th Main of Peenya IV Phase Industrial Area, Yeshwanthpur Hobli, Bangalore North Taluk – 560058
Phone: 08042046782
Email: [email protected]
Website: https://unimechaerospace.com/

Unimech Aerospace IPO Registrar Details

Registrar: Kfin Technologies Limited
Address: KFintech, Tower-B, Plot No 31 & 32, Financial District, Nanakramguda, Gachibowli, Hyderabad, Telangana, India – 500032
Phone: 04067162222, 04079611000
Email: [email protected]
Website: https://kosmic.kfintech.com/ipostatus/

Disclaimer: We are not a SEBI-registered research analyst. This article is written solely for educational purposes and should not be interpreted as investment advice or recommendations. The stock market involves significant risks, so we encourage you to seek guidance from a financial advisor before making any investment decisions.

FAQs

Q1. What is Unimech Aerospace IPO?
Unimech Aerospace IPO is a book-built issue of both a fresh and an offer for sale issue, where the company aims to raise ₹500 crore through this IPO.

Q2. What is the price band of Unimech Aerospace IPO?
The price band of this IPO has been fixed at ₹745 to ₹785 per share. This price range presents a good opportunity for investors.

Q3. What are the important dates for Unimech Aerospace IPO?
The IPO opens on 23 December 2024 and closes on 26 December 2024. The listing of shares will take place on 31 December 2024 on NSE and BSE.

Q4. How many shares are being offered in the Unimech Aerospace IPO?
A total of 63,69,424 shares are being offered in the company’s IPO.

Q5. What is the lot size of Unimech Aerospace IPO?
The lot size of the Unimech Aerospace IPO is 19 shares.

Q6. What is the expected listing gain for Unimech Aerospace IPO?
The Grey Market Premium (GMP) of the Unimech Aerospace IPO has reached ₹406, indicating an expected listing gain of around 51%.

Q7. Who are the lead managers of Unimech Aerospace IPO?
The lead managers of this IPO are Anand Rathi Securities Limited and Equirus Capital Private Limited.

Q8. How to apply for the Unimech Aerospace IPO?
You can apply for Unimech Aerospace IPO online through ASBA via your bank account. Alternatively, you can apply via UPI through your stockbroker or submit an offline application form through your broker. The deadline for submitting IPO applications is December 26, 2024.

Q9. How to apply for the Unimech Aerospace IPO through Angel One?
To apply for the Unimech Aerospace IPO through Angle One, first Log in to the Angel One application with your credentials. Select the IPO. You will see the IPO Name “Unimech Aerospace IPO”. Click on the Bid button. Confirm your Application. Now go to your UPI app or Net Banking or BHIM app to approve the mandate.

Q10. How to apply for the Unimech Aerospace IPO through 5 Paisa?
To apply for the Unimech Aerospace IPO through 5 Paisa. First, log in to the 5 Paisa application with your credentials. Select the IPO. You will see the IPO Name “Unimech Aerospace IPO”. Click on the Bid button. Confirm your Application. Now go to your UPI app or Net Banking or BHIM app to approve the mandate.

Q11. How to apply for the Unimech Aerospace IPO through Upstox?
Log in to the Upstox application with your credentials. Select the IPO. You will see the IPO Name “Unimech Aerospace IPO”. Click on the Bid button. Confirm your Application. Now go to your UPI app or Net Banking or BHIM app to approve the mandate.

Q12. How to apply for the Unimech Aerospace IPO through IIFL?
Log in to the IIFL application with your credentials. Select the IPO. You will see the IPO Name “Unimech Aerospace IPO”. Click on the Bid button. Confirm your Application. Now go to your UPI app or Net Banking or BHIM app to approve the mandate.

Share on Facebook

Post on X

Follow us

Save