Engineering solutions company Unimech Aerospace And Manufacturing Ltd.’s initial public offering is scheduled to open on Dec. 23.

The price band for the IPO has been set in the range of Rs 745 to Rs 785 per share. The market value at the upper end of the price band is Rs 3,992 crore, as per NDTV Profit’s calculations.

The proposed public offering consists of a fresh issue of Rs 250 crore and an offer-for-sale component of Rs 250 crore, according to the draft red herring prospectus.

The offer for sale consists of sale of equity shares up to Rs 45 crore by Ramakrishna Kamojhala, up to Rs 45 crore by Mani P, up to Rs 45 crore by Rajanikanth Balaraman and up to Rs 30 crore by Preetham S V. Rasmi Anil Kumar, the promoter group, will offload stocks worth Rs 85 crore.

Anand Rathi Advisors Ltd., and Equirus Capital Pvt. are the book-running lead managers to the issue and KFin Technologies Ltd. is the registrar to the offer.

The equity shares are proposed to be listed on both Bombay Stock Exchange and National Stock Exchange.

The anchor investment round saw Rs 149.5 crore raised from investors. The IPO will close on Dec. 26.

Unimech Aerospace IPO Details

  • Issue opens: Dec. 23.

  • Issue closes: Dec. 26.

  • Issue price: Rs 745-785.

  • Offer for sale: Rs 250 crore.

  • Fresh issue: Rs 250 crore.

  • Total issue size: Rs 500 crore.

  • Lot size: Minimum 19 shares, and then in multiples thereof.

Business

The Bengaluru-based firm is a leading manufacturer of complex tooling, mechanical assemblies, electro-mechanical turnkey systems, and precision components for clients in the aerospace, energy and semi-conductor industries. These components are used in aeroengine and airframe tooling for production, maintenance, repair and overhaul, and line maintenance activities.

The company offers a diverse range of products and manufactures relatively small quantities of each, tailored to specific customer requirements.

Financial Performance

The company reported a nearly two-fold rise in net profit at Rs 58.10 crore in the last financial year from Rs 21.20 crore in the previous fiscal. Revenue was up 122% to Rs 478 crore.

Operating income, or earnings before interest, taxes, depreciation, and amortisation, rose to Rs 79.18 crore in the same period. The Ebitda margin expanded to 37.9% from 36.7%.

As of Oct. 31, 2024, the company’s debt pile stood at Rs 75.1 crore.

Use Of Proceeds

Net proceeds from the issue, amounting to Rs 32.5 crore, will be used for funding capital expenditure for expansion through purchase of machinery and equipment. A total of Rs 25.2 crore will go towards working capital requirements of the company and for investments in its material subsidiary.

While Rs 43.9 crore will go towards capital expenditure for expansion through purchase of machinery and equipment, Rs 44.7 crore will go towards working capital. The company will use Rs 40 crore for repayment or prepayment of borrowing and towards general corporate purposes.

Future Growth Strategies

The company’s growth strategies include expanding their facilities, addition of capacities and pursuing strategic acquisitions, as necessary. In July 2024, the company allotted equity shares by way of preferential issue to ValueQuest SCALE Fund (a scheme of ValueQuest Alternate Investment Trust), Evolvence India Fund IV Ltd. and Steadview Capital Mauritius Ltd. for the purpose of investing in inorganic opportunities.

Unimech Aerospace IPO: Key Risks

  • Aerospace Sector Dependency: Adverse changes in the aerospace sector could negatively impact business, operations, and financial condition;

  • Long Gestation Period: A significant time gap of seven to 28 weeks between order receipt and payment may affect working capital requirements;

  • Global Market Risks: Adverse conditions in key markets, including the United States and Germany, may harm business, cash flows, and financial stability;

  • Innomech Reliance: Dependency on the operating income and cash flows of subsidiary Innomech poses risks; any loss, reduction, or shareholding change could materially affect consolidated financial performance.

Unimech Aerospace IPO GMP

The grey market premium of Unimech Aerospace IPO is Rs 480 as of 7:54 a.m. on Dec. 23, according to InvestorGain. This implies shares of the company will likely list at Rs 1,265 apiece, indicating a 61.15% premium to the upper end of the price band.

It should be noted that GMP or grey market price is not an official price quote for the stock and is based on speculation.

Watch The IPO Adda Here

Disclaimer: Investments in initial public offerings are subject to market risks. Please consult with financial advisors and read red herring prospectus thoroughly before placing bids.

. Read more on IPOs by NDTV Profit.Unimech Aerospace And Manufacturing’s market value at the upper end of the price band is Rs 3,992 crore, as per NDTV Profit’s calculations.  Read MoreIPOs, Markets, Business, Notifications 

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