Unimech Aerospace and Manufacturing Limited, a leading global player in high precision engineering solutions, has launched its IPO, aiming to raise ₹500.00 Crores. This amount is divided into a Fresh Issue of 31.84 Lakh shares worth ₹250 Crores and an Offer for Sale (OFS) of an equal number of shares totaling ₹250 Crores. The IPO opens for subscription on December 23, 2024, and closes on December 26, 2024, with the allotment expected on December 27, 2024, and shares to be listed on the BSE and NSE with a tentative listing date of December 31, 2024.

The Unimech Aerospace IPO comes with a price band of ₹745 to ₹785 per equity share, which values the company at a market capitalization of ₹3,992.26 Crores at the upper price band. Retail investors can apply for a minimum of 19 shares (₹14,915), while High-Net-Worth Individuals (HNIs) need to invest in at least 14 lots (266 shares), amounting to ₹208,810. Equirus Capital Private Limited and Anand Rathi Advisors Limited are the book-running lead managers for the issue, and KFin Technologies Limited serves as the registrar.

The Grey Market Premium (GMP) for the Unimech Aerospace IPO indicates strong demand, with a reported GMP of ₹550. This translates into a potential listing gain of around 70.07% based on the financial performance and demand for the shares in the unlisted market. However, investors should be cautious as the Grey Market Premium is not an accurate reflection of the final listing price, and trading in the grey market is not recommended for actual price discovery.

The IPO has garnered considerable attention, with the IPO subscription status showing strong demand. As of 11:00 AM on December 26, 2024, the IPO has been subscribed 24.38 times on its final day, indicating robust investor confidence in the company’s growth prospects.

Unimech Aerospace has also raised ₹149.55 Crores from Anchor Investors, with shares allocated at ₹785 per share. The allocation was made to a total of 19,05,094 equity shares. The anchor investor participation further validates the company's potential and reflects positive sentiment around its business model.

The objectives of the Unimech Aerospace IPO include funding capital expenditure for the purchase of machinery and equipment for its expansion and meeting working capital needs. In addition, the funds will be used for investment in subsidiaries and repayment of borrowings, ensuring the company is well-positioned to achieve long-term growth.

The company’s financial performance over the past years has shown a steady upward trend, with revenues of ₹1,275.77 million for the period ended September 30, 2024, and an EBITDA of ₹557.49 million. The Profit After Tax (PAT) for the same period stood at ₹386.80 million, highlighting a positive growth trajectory. The company also boasts an impressive ROCE of 54.36% and ROE of 53.53% for FY24, signaling strong operational efficiency and profitability.

Looking at the IPO’s valuation, the P/E ratio at the upper price band is 59.33x, which is relatively lower than the industry P/E ratio of 102x, suggesting the IPO is fairly priced and presents a good opportunity for investors. The pre-issue EPS stands at ₹13.23, and the post-issue EPS is expected to be ₹11.43 for FY24, indicating healthy earnings growth.

Given the company’s established position in aerospace, energy, and semi-conductor industries, along with its growth potential and strong financials, the Unimech Aerospace IPO is an attractive option for investors, especially those seeking long-term growth in the aerospace sector.

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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