Unimech Aerospace IPO 2024: Key Insights for Investors
Unimech Aerospace and Manufacturing Limited, a leading player in the aerospace, defence, and energy sectors, is all set to launch its ₹500 crore Initial Public Offering (IPO) from 23 December to 26 December 2024. The company specializes in high precision engineering solutions, manufacturing complex products for a variety of industries. Here’s everything you need to know before considering an investment in the Unimech Aerospace IPO:
What makes Unimech Aerospace and Manufacturing a good investment opportunity?
Unimech Aerospace and Manufacturing Ltd. is a global leader in providing high precision engineering services, specializing in manufacturing complex, customized components for the aerospace, defence, energy, and semiconductor sectors. The company’s portfolio includes advanced products like engine lifting and balancing beams, calibration tooling, and ground support equipment. With a strong focus on “build to print” and “build to specifications” services, the company is well-positioned to capitalize on the growing demand for critical components in these industries.
With over 3,000 SKUs delivered to 26+ clients across 7 countries, Unimech plays a crucial role in the global supply chain, making it an attractive option for investors.
What are the IPO dates, price band, and issue size?
Here are the key details of the IPO:
- IPO dates: December 23rd – December 26th, 2024
- Listing date: December 31st, 2024
- Price band: ₹745 – ₹785 per share
- Total issue size: ₹500 Cr (₹250 Cr of Fresh Issue & ₹250 Cr of Offer for Sale)
- Face value: ₹5 per share
- Listing Exchange: BSE, NSE
- Lot size: 19 Shares
- Promoters: Anil Kumar P, Ramakrishna Kamojhala, Mani P, Rajanikanth Balaraman, and Preetham SV.
What is the minimum investment for the IPO?
The minimum investment required to apply for the Unimech Aerospace IPO is ₹14,155, based on the lot size of 19 shares at the lower price band of ₹745 per share. However, to increase your chances of allotment, we recommend applying at the upper price band, which would require ₹14,915 (19 shares at ₹785 per share).
What does the company do?
Founded in 2006, Unimech Aerospace and Manufacturing Ltd. specializes in precision engineering solutions for sectors like aerospace, defence, and energy. The company offers machining, fabrication, assembly, and testing services, often producing customized, single-unit products based on specific client needs. With certifications like AS9100D and BS EN ISO 9001:2015, the company ensures high-quality standards in its manufacturing processes.
What is the objective of the IPO?
The primary objectives of the Unimech Aerospace IPO are:
- To fund capital expenditure for expanding manufacturing capabilities through the purchase of new machinery and equipment.
- To fulfil working capital requirements.
- To invest in its material subsidiary for capital expenditure, working capital, and debt repayment.
- General corporate purposes.
How much is reserved for retail and other investors?
The IPO allocation is as follows:
- Qualified Institutional Buyers (QIBs): Up to 50%
- Non-Institutional Investors (NIIs): At least 15%
- Retail Investors: At least 35%
What are the key strengths and risks?
Strengths:
- Specialized in manufacturing complex, customized products for critical industries like aerospace and defence.
- Strong export business, with 90% of revenue coming from international markets, contributed to higher margins.
- Certifications like AS9100D & BS EN ISO 9001:2015 ensure adherence to global quality standards.
- Digital manufacturing systems help streamline operations and enhance output quality.
- Significant entry barriers due to complex production processes and lengthy client approvals.
Risks:
- High reliance on the aerospace sector, which could be affected by industry changes or economic downturns.
- Heavy dependence on the top 10 customers for 95% of revenue, making the company vulnerable to the loss of any major client.
- Vulnerable to delays in statutory dues, legal proceedings, and product defects that could impact costs and revenues.
- Export dependence exposes the company to foreign exchange risks and geopolitical uncertainties.
What is the financial performance of Unimech Aerospace?
The company has shown consistent growth over the years (INR Cr):
| Period Ended | 30 Sep 2024 | 31 Mar 2024 | 31 Mar 2023 | 31 Mar 2022 |
| Assets | ₹509.27 | ₹175.63 | ₹93.34 | ₹56.87 |
| Revenue | ₹127.58 | ₹213.78 | ₹94.93 | ₹37.08 |
| Profit After Tax | ₹38.68 | ₹58.13 | ₹22.81 | ₹3.39 |
What is the allotment and listing timeline?
- Basis of allotment: December 27, 2024
- Refund initiation: December 30, 2024
- Shares credited to demat accounts: December 30, 2024
- Listing date: December 31, 2024
Should you invest in Unimech Aerospace and Manufacturing Limited IPO?
Unimech Aerospace offers a promising investment opportunity with its solid track record, strong export business, and expertise in the manufacturing complex, customized products for key industries. However, investors should be aware of the risks, including heavy reliance on the aerospace sector and the company’s dependence on a small number of clients.
Evaluate your risk appetite and investment goals carefully before participating in this IPO.
