Unimech Aerospace and Manufacturing, a global leader in high-precision engineering solutions, is set to launch its Initial Public Offering (IPO) on December 23, 2024. The company specializes in the manufacturing of complex products for the aerospace, energy, and semiconductor industries, with offerings that include machining, fabrication, assembly, and testing. The IPO aims to raise ₹500 Crores, with a fresh issue of ₹250 Crores and an offer for sale of ₹250 Crores, both consisting of 31.84 lakh shares.

The subscription period for the IPO is scheduled from December 23, 2024, to December 26, 2024, with the allotment expected to be finalized on December 27, 2024, and the shares set to list on the BSE & NSE on December 31, 2024. The price band for the Unimech Aerospace IPO is set at ₹745 to ₹785 per share, giving the company an estimated market capitalization of ₹3,992.26 Crores at the upper price band.

The lot size for the IPO is 19 shares, requiring a minimum investment of ₹14,915 for retail investors, while High-Net-Worth Individuals (HNIs) are required to apply for a minimum of 14 lots (266 shares), amounting to ₹208,810.

IPO Subscription Status and Investor Demand

As of 5:00 PM on December 26, 2024, the Unimech Aerospace IPO had been subscribed 174.75 times on its final day, indicating strong demand. The Grey Market Premium (GMP) stands at ₹550, which suggests potential listing gains of 70.07% for early investors. The GMP reflects market sentiment and expectations for the IPO's performance post-listing but should be viewed with caution as trading in the grey market is informal and speculative.

Key Financial Metrics and Valuation

Unimech Aerospace has shown consistent growth over the past few years. For the period ended September 30, 2024, the company recorded revenues from operations of ₹1,275.77 Million, an EBITDA of ₹557.49 Million, and a Profit After Tax (PAT) of ₹386.80 Million. These figures reflect the company’s ability to scale operations and improve profitability steadily.

The company’s key performance indicators include a pre-issue EPS of ₹13.23 and a post-issue EPS of ₹11.43 for FY24. The pre-issue P/E ratio is 59.33x, and the post-issue P/E ratio is 68.67x, compared to the industry’s P/E ratio of 102x, indicating that the IPO is reasonably priced. Additionally, the company boasts impressive Return on Capital Employed (ROCE) and Return on Equity (ROE) for FY24 at 54.36% and 53.53%, respectively.

Use of Proceeds from the IPO

Unimech Aerospace intends to utilize the net proceeds from the IPO for the following purposes:

1. ₹363.66 Million for capital expenditure to expand through the purchase of machinery and equipment.
2. ₹252.85 Million for working capital requirements.
3. Investments in a material subsidiary, which includes:
   • ₹438.91 Million for the purchase of machinery and equipment.
   • ₹447.15 Million for working capital.
   • ₹400.00 Million for the repayment or prepayment of certain borrowings.
4. General corporate purposes.

Anchor Investors and Institutional Support

The Anchor Investor portion of the IPO raised ₹149.55 Crores from institutional investors, with 19,05,094 equity shares allocated at ₹785 per share. This investment reflects confidence from institutional players in the company's future prospects.

Conclusion and IPO Recommendation

Given Unimech Aerospace’s strong financial growth, attractive valuation, and significant demand shown through subscription levels and Grey Market Premium (GMP) trends, the IPO is likely to offer significant listing gains. This makes the Unimech Aerospace and Manufacturing IPO an attractive option for risk-tolerant investors looking for short-term gains and long-term growth potential in the aerospace, energy, and semiconductor sectors.

Investors should consider applying for this IPO, particularly if they are looking for exposure to a high-growth engineering company with solid fundamentals and a strong market position in key global industries. For detailed updates, check the live subscription status and GMP trends to monitor the IPO’s performance.

The Upcoming IPOs in this week and coming weeks are Citichem India, Indo Farm, Technichem Organics, Leo Dry Fruits, Solar91 Cleantech, Rosmerta Digital and Avanse Financial.

The Current active IPO is Anya Polytech and Unimech Aerospace.

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