Tue Dec 24 20:20:06 UTC 2024: **Unimech Aerospace IPO Oversubscribed Nine Times on Day Two**
BENGALURU, INDIA – Unimech Aerospace and Manufacturing Ltd.’s initial public offering (IPO) has seen phenomenal success, closing its second day of bidding with a 9.09 times oversubscription. This follows a strong first day, where it was subscribed 3.82 times. The IPO, priced between Rs 745 and Rs 785 per share, raised a total of Rs 500 crore (approximately $60 million USD), comprising Rs 250 crore from a fresh issue and Rs 250 crore from an offer-for-sale (OFS).
The strong demand has fueled a significant 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. While the GMP is unofficial and speculative, it reflects investor enthusiasm. The company’s robust financial performance, with a near doubling of net profit to Rs 58.1 crore in fiscal 2024, alongside a 122% revenue increase, likely contributed to this positive market reception.
The allocation breakdown shows strong interest from various investor categories: Qualified Institutional Buyers (QIBs) at 4.64 times, Non-Institutional Investors (NIIs) at 12.07 times, and employees at a remarkable 15.56 times oversubscription.
Unimech Aerospace, a Bengaluru-based manufacturer of complex components for the aerospace, energy, and semiconductor industries, plans to utilize the net proceeds of Rs 32.5 crore for capital expenditure, working capital requirements, and debt repayment. The company also highlighted growth strategies involving facility expansion, capacity additions, and strategic acquisitions.
However, potential investors should be aware of the risks outlined in the company’s prospectus, including dependence on the aerospace sector, long order-to-payment cycles, and exposure to global market fluctuations. As with all IPOs, investment decisions should be made after careful consideration and consultation with financial advisors.
First Piper 