IPO listed on 31 Dec'24
Unimech Aerospace & Manufacturing Ltd
Minimum Investment
₹ 14,915 / 19 shares
Grey market premium
₹ 625 (80% premium)
Issue price
₹ 785
Listing price
₹ 1,460
Listing gains
675 (86%)
Listing on
Dec 31, 2024
Our Verdict:
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- Unimech Aerospace & Manufacturing Ltd (Unimech) has demonstrated remarkable growth, leading the industry with a 140% CAGR in revenue between FY22 and FY24. It also boasts some of the highest EBITDA and PAT margins in 2024, underpinning strong financial health and profitability.
- The IPO is priced at a P/E multiple of 59x based on FY24 earnings, and the grey market premium indicates a strong debut on the stock exchanges.
- Unimech's niche product line presents significant growth prospects, given the global MRO (maintenance, repair, and operations) tooling market's estimated value of $19 billion. Moreover, the company is actively seeking expansion opportunities in complex sectors like medical devices, semiconductors, and robotics.
- Given these factors, investors may consider subscribing to the IPO from a long-term perspective.
About the company
Founded in
12 Aug'16
Managing director
Anil Kumar P
- Unimech is an engineering solutions provider specializing in the manufacture of critical components such as aero tooling, ground support equipment, and precision-engineered parts. It offers build-to-print services, producing products from client designs, and build-to-specification services, assisting in designing products tailored to client needs for industries like aerospace, defense, energy, and semiconductors.
- Operating out of two facilities in Bengaluru, Unimech covers 120,000 sq. ft. and is equipped with advanced manufacturing capabilities including turning, milling, double column milling, electro discharge machining, and grinding.
STRENGTHS
- Diverse Product Offering & Global Reach: Between FY22 and the six-month period ending September 30, 2024, Unimech has produced 2,999 SKUs in tooling and precision complex sub-assemblies, and 760 SKUs in the precision machined parts category, serving over 26 customers across 7 countries.
- Exceptional Financial Growth: Unimech has demonstrated significant growth, with operational revenue, EBITDA, and net profit achieving impressive compounded annual growth rates (CAGRs) of 140%, 220%, and 314% respectively, from FY22 to FY24.
- Strong Return Metrics: Despite a lengthy cash conversion cycle, Unimech maintains a healthy balance sheet with a low debt-equity ratio of 0.32x and delivers superior return ratios. Its Return on Equity stands at 53.5% and Return on Capital Employed at 54.4% as of FY24, outperforming its peers.
- High Profitability Margins: Unimech is distinguished by some of the highest profitability margins in its sector, with an EBITDA margin of 37.9% and a PAT margin of 27.8% as of FY24. These margins reflect the firm’s successful scale enhancement and operational efficiencies.
RISK FACTORS
- Client Concentration: Unimech faces significant client concentration risk, as a major portion of its revenue depends on a few key clients. As of September 30, 2024, the top five customers represent nearly 95% of total revenue.
- Export Dependency & Currency Risk: Unimech primarily earns its revenue from exports, with over 90% of its sales directed to the US market in FY24. Without a hedging policy, the firm is vulnerable to risks associated with foreign currency fluctuations and export market disruptions, which could adversely affect its business and financial standing.
Issue details
Issue type
Mainstream
Issue size
₹ 500 crore
Fresh Issue
₹ 250 crore
OFS
₹ 250 crore
Price range
₹ 745 - 785
Lot size
19 shares
Issue Objective
Unimech intends to utilise the net proceeds from the fresh issue for:
- Capital expenditure expansion via machinery and equipment purchases;
- Working capital needs;
- Investments in a material subsidiary for machinery purchases, working capital, and repayment/prepayment of some borrowings;
- General corporate purposes.
Dates
Bidding open
23 Dec'24
Bidding close
26 Dec'24
Allotment date
27 Dec'24
Refund date
30 Dec'24
Listing
31 Dec'24
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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