Unimech Aerospace IPO - Price, GMP, Date and Analysis

Unimech Aerospace IPO - Complete Overview 

Unimech Aerospace IPO a Mainboard IPO is a book-built issue of Rs.500 Cr (63,69,424 Shares) by Unitech Aerospace and Manufacturing Limited incorporated in 2016. It is part and parcel for, as he was, to turn raw steel bars into mechanical assemblies, and electro-mechanical machines from the component level-aero engine to airframe production. 

It offers engineering solutions, and being a complex product manufacturer, the company's services include “build to print” and “build to specifications”, which entails machining, fabrication, assembly, testing, and creation of newly tailored products based on the specifications needed by clients from aerospace, defense, energy, and semiconductor industries.

Thus, between the years 2022 and 2024, the company manufactured 2,356 SKUs under tooling and precision complex sub-assemblies, and another 624 SKUs under the precision machined parts category, supplying to over 26 sources in seven countries.

Two production plants are currently operated by the company within Bangalore by March 31, 2024, occupying a site of more than 1,20,000 sq ft of floor space in total. Unit I is located in Peenya and covers an area of more than 30,000 sq ft while Unit II is located in a Special Economic Zone adjacent to Bangalore International Airport and comprises over 90,000 sq ft. The facilities hold registration with ISO.

As of March 31, 2024, the company has a workforce of 384 employees.

Unimech Aerospace Product Portfolio:

Aero Engine tooling: Engine lifting and balancing beams, Oil Tubes Alignment Fixture, Radial Centering Support, etc. 

Airframe tooling: Lateral Spar Assembly, Drill Jig, Airframe Assembly Platforms 

Precision Parts: Missile Component, Missile Component 

Precision Sub System: Rocker Arm - HMC CDA

This new IPO is to be launched on 23 December 2024, and the initial public offering of this upcoming IPO will end on 26 December 2024.

Unimech IPO Details

The Rs.500 Crore Unimech IPO comprises a combination of a fresh issue of 0.32 Cr Shares (Rs.250 Cr) and an offer for sale (OFS) of 0.32 Cr Shares (Rs.250 Cr). The IPO listing date is on December 31, 2024. Unimech Aerospace IPO price is Rs.745 to Rs.785. 

If you want to apply for the IPO, Click Here to open a Demat Account.

Company Financial

Between FYs ended 31 March 2024 and 31 March 2023, the company's revenue grew by 125%, and PAT increased by 155%.
(Amount in Crore)

Cash Flows

The cash flows for various activities are shown below:

(Amount in millions)

 

Geography-wise Revenue from Operations

(Amount in millions)

Geography-wise Revenue Bifurcation (Outside India)

(Amount in millions)

 

Industry-wise Revenue Bifurcation

(Amount in millions)

(Source RHP)

The Objective of the Issue

• Financing capital expenditures for growth using the company's acquisition of machinery and equipment.

• Financing the company's operating cash needs.

• Investment in the material subsidiary for the following purposes: 

(i) Financing its working capital needs

(ii) Buying machinery and equipment

(iii) Repaying or partially repaying some of the loans that its material subsidiary has taken out.

 

Peers of Unimech Aerospace Limited

 

Evaluation

The Unimech Aerospace and Manufacturing Limited IPO price band is between Rs.745 to Rs.785 for each Share.

Evaluation of P/E Ratio

Considering the FY ended 31 Mar 2024 with an EPS of Rs.13.23 from the last year, the resulting P/E ratio is 59.33x. 

Considering the weighted EPS of Rs.8.47 for the last three years, the P/E ratio is 92.68x.

Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is 222.44x.

In simple words, the P/E ratio of this IPO (59.33x), compared with the industry’s average P/E of 222.44x, has an undervaluation (on a P/E ratio basis only). Hence the price of the Share seems fully priced for the investors when considered based on the average P/E ratio of the industry.

IPO's Strengths

• Competencies in high-end manufacturing for delivering precision engineering.

• Multi-billion dollar digital manufacturing company with excellent infrastructure for seamless integration of operations.

• The mature player with distinctive competencies in a high barrier-to-entry market.

• Export-driven player: global delivery service model.

• Powerful vendor ecosystem along with strong contractor management proven execution capability.

• Strong experience in having complementary management teams having sound implementation skills and operational effectiveness.

 

IPO’s Weaknesses

• Reliance on the Aerospace Sector: 98.25% of the revenue earned is from the aerospace sector during a period of six months closing September 30, 2024. Any changes detrimental to the business in this particular sector will reflect unfavorably in the operations and the finances of the company.

• Middle Customers & Company's Reliance: More than 90% of the total revenues are dependent on the top five customers of the company. Losing any of these important customers, or even a change in the volume of their purchase, would cause adverse effects on the financial conditions of the company.

• Long Payment Terms: The business usually understands long gestation periods that include an average time from order to payment of 7 to 28 weeks. Also, this scenario affects operational cash flows and requirements of working capital.

• Foreign currency exposure: A large portion of sales revenue comes from exports (95.67% to 97.64% in the recent financial period). Thus, an adverse movement in foreign currency rates, particularly between the Indian Rupee and currencies like the dollar and euro, affects profitability.

• Cash Flow Issues are Negative: The company has had negative cash flows from the investments and financing activities in previous periods. The negative cash flows would adversely affect financial resources and operational stability if they recur in the future.

 

Unimech Aerospace IPO GMP

Unimech Aerospace IPO GMP today is Rs.405 as of 19 December 2024. With the price band of Rs.785, the estimated Unimech IPO listing price is Rs.1190 while writing this information.

Unimech IPO Timetable (Tentative)

The IPO date is from 23 December to 26 December, with IPO allotment on 27 December, and refund initiation on 30 December. The IPO listing date is on 31 December 2024.

Unimech Aerospace and Manufacturing IPO Other Details 

IPO with a face value of Rs.5 per Share, the IPO size is 63,69,424 Shares (Rs.500 Cr) and it will be listed at BSE and NSE.

Unimech Aerospace IPO Lot Size

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (19 Shares) amounting to Rs.14915 and 13 Lots (247 Shares) amounting to Rs.1,93,895 respectively, while for HNI investors, the minimum Lot is 14 (266 Shares) amounting to Rs.2,08,810.

IPO Reservation

Promoters and Management of Unimech Aerospace Ltd.

• Anil Kumar P

• Ramakrishna Kamojhala

• Mani P

• Rajanikanth Balaraman

• Preetham SV.
  
  

IPO Lead Managers

• Anand Rathi Securities Limited

• Equirus Capital Private Limited.

 Dividend Policy

The company has not paid a dividend in the last three FYs.

Conclusion

Investors' excitement is aroused by the Unimech Aerospace IPO, which is likely to stimulate its growing markets and primarily manufacture precision engineering offerings. The company, however, is laced with impressive financial growth, well positioned in a thriving sector along with risks like dependency on key customers and foreign currency exposures. Given its P/E ratio, this IPO looks reasonably priced when compared to peers in the industry

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here  to Download the DRHP.

DISCLAIMER: This is NOT any buy or sell recommendation. No investment or trading advice is given. The content is purely for educational and information purposes only. Always consult your eligible financial advisor for investment-related decisions. 

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