The initial public offering (IPO) of Uniparts India opened for subscription on Wednesday. The global engineering systems and solutions provider fixed the IPO price band 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, booked 58 per cent on the first day of bidding.
The non-institutional investors’ category got a 90 per cent subscription and the retail investors’ portion witnessed a 77 per cent subscription by 5 pm today. However, the quota for qualified institutional buyers failed to attract any bids so far.
The initial share sale is entirely an offer for sale (OFS) of 14,481,942 equity shares by promoter group entities and existing investors.
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Those offering shares in the OFS are promoter group entities The Karan Soni 2018 CG-NG Nevada Trust, The Meher Soni 2018 CG-NG Nevada Trust, Pamela Soni, and investors Ashoka Investment Holdings Ltd and Ambadevi Mauritius Holding Ltd.
Since the IPO would be entirely an OFS, the company would not receive any proceeds from the public issue. The IPO would conclude on December 2.
“The company’s international sales accounted for over 82 per cent of total sales in FY22. There is a steady growth in revenues and margins over the past three fiscal years. The implied market cap at the upper price band of the issue stands at approx. Rs 2,604 crore and the asking P/E multiple is 15.28x, which looks reasonable as compared to its peers. The market is at all-time highs which should also boost the interest of investors,” Manan Doshi of UnlistedArena.com, dealing in unlisted & pre-IPO shares, told Business Today.
Latest grey market premium
Market participants said Uniparts India IPO grey market premium (GMP) was seen around Rs 70. It implied that the grey market expected the company to list around Rs 647 (Rs 577 + Rs 70), a little over 12 per cent higher than the IPO’s upper band price of Rs 577 per equity share.
The basis of share allotment may happen on December 7, followed by a likely listing on December 12.
Brokerage view
Swastika 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 continuous growth in revenue and profit and improving margins. As for the risk factor, the issue is a complete offer for sale. However, the issue is attractively priced at a P/E valuation of 15.61, which is lesser than its listed peers, and thus we assign a ‘Subscribe’ rating to this issue for aggressive investors.
Ventura Securities: The brokerage, which has given a ‘Subscribe’ rating to the IPO, has set a base 18-month price target of Rs 711, suggesting an upside of 23.2 per cent over the IPO price. Ventura Securities has a bull case target of Rs 964 (67 per cent potential upside) and a bear case target of Rs 449 (22.2 per cent potential downside).
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A host of other brokerages including Nirmal Bang, Religare Securities, Hem Securities and KRChoksey Shares & Securities also assigned a ‘Subscribe’ rating to the issue.
Uniparts India is a supplier of systems and components for 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.