The Unimech Aerospace and Manufacturing IPO, a ₹500 crore Book Built Issue, has garnered remarkable attention from investors. Opening on December 23, 2024, and closing on December 26, 2024, the IPO consists of a Fresh Issue of ₹250 crore and an Offer for Sale (OFS) of ₹250 crore. The price band is set between ₹745 to ₹785 per share, with a lot size of 19 shares.

Company Overview and Financial Performance

Unimech Aerospace and Manufacturing is a leading global high-precision engineering solutions company catering to the aerospace, energy, and semiconductor industries. It specializes in “build to print” and “build to specifications” offerings, involving machining, fabrication, assembly, testing, and product development.

The company is helmed by experienced professionals, including Anil Kumar P (Chairman & Managing Director) with over 20 years of experience, and supported by a seasoned team.

Unimech’s financial performance highlights consistent growth.

• Revenue: ₹1,275.77 million (H1 FY24) compared to ₹949.30 million (FY23).
• EBITDA: ₹557.49 million (H1 FY24) versus ₹353.27 million (FY23).
• PAT: ₹386.80 million (H1 FY24), marking a significant improvement from ₹228.13 million (FY23).

The company demonstrates robust profitability with a ROCE of 54.36% and ROE of 53.53% for FY24. The pre-issue P/E ratio of 59.33x is competitive compared to the industry average of 102x.

IPO Highlights and Valuation

The Grey Market Premium (GMP) for Unimech Aerospace is ₹550, suggesting a potential listing price of ₹1,335, a 70.07% premium over the upper price band of ₹785. With such promising figures, the IPO has seen tremendous demand, reflected in its 175.31x subscription on the final day.

The company raised ₹149.55 crore from anchor investors, further validating its strong fundamentals and market interest.

Objectives of the IPO

The proceeds from the IPO are earmarked for:

1. ₹363.66 million for capital expenditure on machinery and equipment.
2. ₹252.85 million for working capital needs.
3. Investment in the material subsidiary for machinery, working capital, and debt repayment.
4. General corporate purposes.

Key Takeaways for Investors

Unimech Aerospace and Manufacturing IPO offers a unique blend of strong financial growth, robust market demand, and a high Grey Market Premium, signaling potential listing gains. However, the high valuation metrics warrant caution for long-term investors.

Should You Invest?

We recommend this IPO for risk-tolerant investors seeking listing gains, given the company’s excellent financials and favorable market sentiment.

The Upcoming IPOs in this week and coming weeks are Indo Farm, Technichem Organics, Leo Dry Fruits, Davin Sons, Fabtech Technologies and Standard Glass Lining.

The Current active IPO is Citichem India and Anya Polytech.

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