Unimech Aerospace & Manufacturing IPO: Issue dates, price, and lot size

Unimech Aerospace & Manufacturing Limited, a cutting-edge player in engineering solutions for aerospace, defense, energy, and semiconductors, is gearing up for an exciting market debut with its ₹500 crore initial public offering (IPO). Open for subscription from December 23 to December 26, 2024, this IPO offers a mix of fresh issue shares worth ₹250 crores and an offer for sale of the same value, signaling a promising opportunity for investors to tap into the company’s high-growth potential.

Priced attractively in the range of ₹745 to ₹785 per share, with a lot size of 19 shares, the IPO allows retail investors to join this journey with a minimum investment of ₹14,915. Share allotment is set for December 27, 2024, with listing expected on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) by December 31, 2024, marking a significant milestone for the company and its stakeholders.

Unimech Aerospace & Manufacturing IPO Details

Unimech Aerospace & Manufacturing Limited IPO is a fundraise worth ₹500 crores comprising fresh issue of 0.32 crore shares and offer for sale of 0.32 crore shares. The IPO will be available for subscription from December 23, 2024, to December 26, 2024, providing an opportunity for investors looking to gain a stake in the company.

Unimech Aerospace & Manufacturing IPO Timeline

The Unimech Aerospace & Manufacturing Limited IPO opens for subscription on December 19, 2024, and closes on December 23, 2024, with allotment slated for December 24, 2024.

Unimech Aerospace & Manufacturing IPO Review

Incorporated in 2016, Unitech Aerospace and Manufacturing Limited specializes in producing complex tools such as mechanical assemblies, electro-mechanical systems, and aerospace components. The company offers "build to print" and "build to specifications" engineering solutions, including machining, fabrication, assembly, and testing. Catering to aerospace, defense, energy, and semiconductor sectors, Unitech has developed 2,356 SKUs in tooling and precision sub-assemblies and 624 SKUs in precision machined parts between 2022 and 2024, supplying to over 26 customers across seven countries.

As of March 31, 2024, Unitech operates two ISO-certified facilities in Bangalore, covering a combined area of over 1,20,000 sq ft, including a Special Economic Zone unit near Bangalore International Airport. With a workforce of 384 employees, the company’s product portfolio includes aero engine tooling, airframe tooling, precision parts, and subsystems, such as engine lifting beams, drill jigs, missile components, and rocker arms. These capabilities position Unitech as a key player in delivering advanced engineering solutions to global clients.

The company plans to use the net proceeds from the fresh issue to fund capital expenditure for machinery and equipment, meet working capital needs, invest in its material subsidiary for similar purposes, repay or prepay certain subsidiary borrowings, and cover general corporate expenses. Proceeds from the Offer for Sale will go to the selling shareholders and not to the company.

Unimech Aerospace & Manufacturing IPO Financials

The Unimech Aerospace & Manufacturing Limited IPO showcases a healthy market capitalization of ₹3,992.27 crores as on March 31, 2024. Key performance indicators reflect the company's financial health, with a Return on Equity (RoE) of 53.53%, Return on Capital Employed (RoCE) of 54.36%, and Debt-to-Equity ratio of 0.32. 

The Return on Net Worth (RoNW) stands at 53.53%, while the Price-to-Book Value (P/BV) is seen at 31.77. The PAT Margin is 27.85. On an annual basis, the company's Profit After Tax (PAT) grew by 155% while the revenue increased by 125% in the financial year ending on March 31, 2024. A comparison of earnings per share (EPS) reveals a pre-IPO EPS of ₹12.19 while it is ₹15.21 post-IPO.

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Unimech Aerospace & Manufacturing IPO strengths

Unimech Aerospace & Manufacturing Limited stands out for its advanced manufacturing capabilities, delivering high-precision engineering solutions for complex industries like aerospace, defense, energy, and semiconductors. As a digital-first company, it integrates cutting-edge technologies across its operations, ensuring seamless execution from order origination to delivery. With its status as an approved supplier for industry leaders, Unimech has solidified its position in a high-barrier sector. The company’s global delivery model and export-driven revenue, particularly from key markets such as the US and Europe, underline its international reach and robust operational infrastructure. 

Further enhancing its profile, Unimech boasts an experienced and complementary management team that drives operational efficiency and strategic implementation. Its ability to customize solutions and cater to evolving client needs makes it a valuable link in the global supply chain for OEMs. Additionally, its track record of rapid revenue growth, supported by a strong vendor ecosystem and subcontractor partnerships, showcases its resilience and adaptability in a competitive market.  

Unimech Aerospace & Manufacturing IPO weaknesses

Unimech faces challenges related to its dependency on the aerospace sector, which contributes nearly all of its revenue. Any adverse shifts in this sector could severely impact its operations and financial performance. Moreover, the company relies heavily on its top five customers, which accounted for 96.8% of its revenue in Fiscal 2024. The loss of any of these customers or reduced orders poses a significant risk. Its export-driven model also leaves it vulnerable to geopolitical and economic fluctuations in key markets like the US and Germany.  

The business operates on long gestation cycles, with delays of 7 to 28 weeks between order receipt and payment, straining working capital. Furthermore, Unimech depends heavily on its subsidiary, Innomech Aerospace Toolings, for a significant portion of its revenue, making it sensitive to any disruptions in subsidiary operations. Past instances of negative cash flows and delayed statutory payments highlight potential financial vulnerabilities. Finally, limited insurance coverage and a lack of long-term contracts with raw material suppliers increase the risk of supply chain disruptions and financial instability.

Should you invest in the Unimech Aerospace & Manufacturing IPO?

The Unimech Aerospace & Manufacturing Limited IPO presents an exciting chance for investors to gain a stake in the engineering solutions company at its early public stage. While the potential for early investment is appealing, making a prudent financial decision requires a careful assessment of the company’s fundamentals, market position, and growth prospects. Investors should conduct thorough research to ensure this opportunity aligns with their financial goals and risk tolerance, turning a promising prospect into a well-informed investment choice.

FAQs

What is the Unimech Aerospace & Manufacturing IPO?

The Unimech Aerospace & Manufacturing Limited IPO is a main-board offering consisting of a fresh issue of 0.32 equity shares and an offer for sale of 0.32 crore shares with a face value of ₹5, aiming to raise a total of ₹500 crores. The share price is set between ₹745 and ₹785, with a minimum order quantity of 19 shares. This IPO will be open for subscription from December 23, 2024, to December 26, 2024. Kfin Technologies Limited is the registrar while Anand Rathi Securities Limited and Equirus Capital Private Limited are the book-running lead managers.

When will the Unimech Aerospace & Manufacturing IPO open?

The Unimech Aerospace & Manufacturing Limited IPO will open for subscription on December 23, 2024, and will close on December 26, 2024.

When is the Unimech Aerospace & Manufacturing IPO listing date?

The tentative listing date for the Unimech Aerospace & Manufacturing Limited IPO is Tuesday, December 31, 2024.