Tue Dec 24 08:12:27 UTC 2024: **Unimech Aerospace IPO Oversubscribed, Commands High Grey Market Premium**

BENGALURU, INDIA – Unimech Aerospace and Manufacturing Ltd.’s initial public offering (IPO) has been overwhelmingly successful, exceeding expectations on its second day. As of Tuesday afternoon, the IPO was subscribed 6.89 times, significantly up from the 3.82 times subscription on Day 1. This strong demand comes despite a price band set between Rs 745 and Rs 785 per share.

The impressive subscription rate is particularly strong in the non-institutional investor category (8.17 times) and employee reserved portion (12.31 times). Qualified institutional buyers subscribed 3.82 times.

The Rs 500 crore IPO, comprising a fresh issue of Rs 250 crore and an offer-for-sale (OFS) of Rs 250 crore, is generating significant buzz in the grey market. InvestorGain reports a grey market premium (GMP) of Rs 510, suggesting a potential listing price of Rs 1,295 – a 64.97% premium over the upper price band. It is important to note that GMP is speculative and not an official price indicator.

Unimech Aerospace, a Bengaluru-based firm, manufactures complex tooling and precision components for the aerospace, energy, and semiconductor industries. The company reported a near doubling of net profit to Rs 58.1 crore in fiscal 2024, accompanied by a 122% surge in revenue to Rs 478 crore.

The proceeds from the IPO will fund capital expenditure (Rs 88.6 crore), working capital requirements (Rs 69.9 crore), debt repayment (Rs 40 crore), and general corporate purposes. The company’s growth strategy includes facility expansion, capacity additions, and strategic acquisitions.

While the IPO shows strong investor confidence, potential investors should be aware of inherent risks, including dependence on the aerospace sector, long order-to-payment cycles, global market volatility, and reliance on its subsidiary, Innomech. Consult with a financial advisor and carefully review the red herring prospectus before investing. The equity shares are proposed to be listed on both BSE and NSE.

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