The initial public offering (IPO) of Uniparts India opened for subscription on Wednesday. The global engineering systems and solutions provider has fixed the price range of the IPO at Rs 548-577 per share. The issue attracted bids for 58,36,700 crore equity shares against the IPO size of 1,01,37,360 shares, with 58 per cent booked on the first day of bidding.
The category of non-institutional investors has received 90 per cent subscription till 5 pm today and the retail investors’ portion has received 77 per cent subscription. However, the quota for qualified institutional buyers has failed to attract any bids so far.
The Initial Share Sale is an Offer for Sale (OFS) of 14,481,942 equity shares solely by the Promoter Group Entities and existing investors.
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Those offering shares in the OFS include promoter group entities The Karan Soni 2018 CG-NG Nevada Trust, The Mehar Soni 2018 CG-NG Nevada Trust, Pamela Soni and investors Ashoka Investment Holdings Limited and Ambadevi Mauritius Holding Limited.
Since the IPO will be purely OFS, the company will not receive any proceeds from the public issue. The IPO will close on December 2.
“The company’s international sales account for more than 82 per cent of total sales in FY22. Revenue and margins have grown consistently over the last three financial years. The market cap implied at the upper price band of the issue is approximately Rs. 2,604 crores.” and P/E multiple of 15.28 times, which looks reasonable compared to its peers and pre-IPO shares, told Business Today.
Latest Gray Market Premium
Market participants said the Uniparts India IPO gray market premium (GMP) was seen at around Rs 70. This implies that the company was expected to list around Rs 647 (Rs 577 + Rs 70) in the gray market, which is 12 per cent higher than the IPO. Upper band price of Rs 577 per equity share.
The share allotment basis could happen on December 7, followed by a possible listing on December 12.
Swastik Investmart: “The company has a leading market presence, a global business model, and long-term relationships with key customers. It also enjoys a healthy financial position with consistent growth in revenue and profits, and improving margins. Risk Factors As such, the issue is an outright offer for sale. However, the issue is attractively priced at a P/E valuation of 15.61, which is lower than its listed peers, and thus we rate the issue for aggressive investors. Subscribe’ rating.
Ventura Securities: The brokerage, which has ‘Subscribe’ rating to the IPO, has an 18-month base price target of Rs 711, an upside of 23.2 per cent to the IPO price. Ventura Securities has a Bull case target of Rs 964 (67% potential upside) and a Bear case target of Rs 449 (22.2% potential downside).,
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Several other brokerages including Nirmal Bang, Religare Securities, Hem Securities and KRC Choksi Shares & Securities have also ‘Subscribe’ rating to the issue.
Uniparts India is a supplier of systems and components to the off-highway market in the agriculture and construction, forestry and mining and aftermarket sectors.
Axis Capital, DAM Capital Advisors and JM Financial are the book-running lead managers to the issue.