Unimech Aerospace IPO: Check subscription status on Day 3 so far & latest GMP

The initial public offering (IPO) of Unimech Aerospace and Manufacturing saw a solid response from the investors during the third and final day of the bidding process. The issue was overall booked 4.05 on the first day of subscription and ended day two with nearly 10 times of bidding.

Unimech Aerospace and Manufacturing is selling its shares in the price band of Rs 745-785 apiece. Investors can apply for a minimum of 19 shares and its multiples thereafter. It is looking to raise Rs 500 crore via IPO, which includes a fresh share sale of Rs 250 crore and offer-for-sale (OFS) of up to Rs 250 crore.

According to the data, the investors made bids for 69,66,98,821 equity shares, or 148.11 times, compared to the 47,04,028 equity shares offered for the subscription by 3.15 pm on Thursday, December 26. The three-day bidding for the issue, which opened on Monday, December 23, shall close today.

The allocation for non-institutional investors (NIIs) was subscribed 238.23 times, while the portion reserved for qualified institutional bidders (QIBs) saw a subscription of 253.34 times. Portion for employees was booked 85.55 times. However, the quota set aside for retail investors was booked 49.89 times as of the time.

Incorporated in 2016, Bengaluru-based Unitech Aerospace and Manufacturing is engaged in the manufacturing of complex tools like mechanical assemblies, electro-mechanical systems, and components for aeroengine and airframe production, specializing in the manufacturing of complex products.

The grey market premium of Unimech Aerospace has seen sharp rise despite the rising volatility and mixed bidding. Last heard, the company was commanding a premium of Rs 630 in the unofficial market, suggesting a listing gain of 80 per cent for the investors. However, the premium in the grey market stood around Rs 510 when the issue opened for bidding.

Unimech Aerospace’s advanced manufacturing capabilities, digital integration, and expertise in high-barrier sectors establish it as a leading player in precision engineering. The company’s strong financial performance is driven by operational efficiency, and global OEM partnerships, said Nirmal Bang Securities.

"With a revenue CAGR of 140 per cent (FY22-24), industry-leading Ebitda margin of 38 per cent, and ROCE of 57.6 per cent, it outperforms peers in growth and profitability. While its valuation multiples EV/EBITDA of 51x and P/E of 69x are more reasonable than its competitors, they reflect its strong fundamentals and growth potential," it added with a 'subscribe' rating.

Unimech Aerospace mobilised Rs 149.5 crore anchor investors as it finalised the allocation of 19.05 lakh shares at Rs 785 apiece. The company has reserved 50 per cent of the net offer for qualified institutional bidders, while non-institutional investors will have 15 per cent of the allocation. Retail investors will get the remaining 35 per cent of the net issue.

Unimech Aerospace is focused on market entry and diversifying its offerings through partnership with global and local manufacturers, building up their expertise and infrastructure. With two operational manufacturing units and an upcoming technology park, it plans to expand its manufacturing into high value sectors, said Arihant Capital Markets.

"By aligning its capabilities with emerging trends and emphasizing high-mix, low-volume products, it aims to strengthen its supply chain, capture niche markets, and address changing customer needs. At the upper band, the issue is valued at a P/E ratio of 68.67 times, based on a FY24 EPS of INR 11.4. We are recommending a 'subscribe for long term' rating for this issue," it said.

Anand Rathi Securities and Equirus Capital are the book running lead managers of the Unimech Aerospace and Manufacturing IPO, while Kfin Technologies is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE on Tuesday, December 31, 2024.