Unimech Aerospace & Manufacturing IPO

Unimech Aerospace & Manufacturing IPO Details

Unimech Aerospace & Manufacturing IPO Date

Unimech Aerospace & Manufacturing Limited IPO will open for subscription on December 23, 2024, and the closing date for the IPO is December 26, 2024, according to the offer document filed by the company with SEBI. After this, investors are expected to be updated about the allotment status on Friday, December 27, 2024.

Investors who have been allotted shares can expect them to be credited to their demat account on December 30, 2024. The shares will be listed on the NSE and the BSE on Tuesday, December 31, 2024.

Unimech Aerospace & Manufacturing IPO Price Band

The IPO is a fresh issue and an offer for sale. The IPO price band has been set between ₹745 and ₹785 per share. Interested investors can choose a price within this band to apply for the IPO.

The IPO is a book-building issue of ₹500 crore, with a fresh issue of 31,84,712 equity shares (approx ₹250.00 crore) and an offer for sale of 31,84,712 equity shares (approx ₹250.00 crore).

Unimech Aerospace & Manufacturing Limited IPO listing price will be determined on December 31, 2024. The listing price is the price at which a company’s shares debut on the stock exchanges.

Unimech Aerospace & Manufacturing IPO Lot Size

The Unimech Aerospace & Manufacturing Limited IPO details have been declared. The minimum lot size for an application is 19 shares, and the investor would have to apply for a minimum of 1 lot. Meanwhile, the IPO issue size is approximately ₹500 crore.

Unimech Aerospace & Manufacturing IPO Objective

The company proposes to utilise the net proceeds of the fresh issue in the following manner:

Business expansion: The company wants to expand by purchasing machinery and equipment with net proceeds worth ₹36.36 crore.

Working capital requirements: The company will allocate ₹25.29 crore for its own working capital needs and requirements.

Investments in subsidiaries: ₹128.61 crore funds will be used to support the company’s investments into subsidiaries and future growth plans.

General corporate purposes: The remaining funds will be used for general corporate needs to expand business. 

About Unimech Aerospace & Manufacturing

Incorporated in 2016, Unimech Aerospace & Manufacturing is an engineering solutions provider that specialises in the manufacturing and supply of critical parts used in aerospace, defence, energy, and semiconductor industries. The company supplies precision components like aero tooling, ground support equipment, and electro-mechanical sub-assemblies.  

The company offers ‘build to print’ capabilities, wherein it manufactures products based on client designs, and ‘build to specifications’ capabilities,  through which it assists clients in designing the products to be manufactured based on specifications. As of September 30, 2024, the company had an order book worth ₹80.75 crore, with a delivery timeline ranging between 4 to 16 weeks.

Unimech Aerospace delivered over 2,999 SKUs in the tooling and precision complex sub-assemblies category and 760 SKUs in the precision machined parts category between FY22 and September 30, 2024. The company delivers its products and services to over 26 customers in seven countries, including the USA, Germany, and the UK. Meanwhile, over 95% of the total revenue came from the export business as of September 30, 2024. 

The company operates through two manufacturing facilities located in Bangalore, with a capacity utilisation of 94.68%. These manufacturing facilities are accredited with various quality standard certificates, including AS 9001D, BS EN ISO 9001 and ISO 45001:2018.  

Between FY22 and FY24, the company's revenue from operations rose at a CAGR of 139.66%, while net profit rose 314.1% during the same period. Meanwhile, the global braking and transmission market is projected to grow at a 20.3% CAGR to reach $350.47 billion by 2028. The precision components market under the Aerospace & Defence sector is expected to grow at a CAGR of 10.8% to reach $189.67 billion. This upbeat industry trend offers a great opportunity for the company to secure new orders and expand its business.

Now, Unimech Aerospace & Manufacturing Limited is launching its initial public offer (IPO). The total IPO issue size is ₹500 crores, comprising an offer for sale and a fresh issue. Its shares will be listed on the NSE and BSE.

Company Name: Unimech Aerospace & Manufacturing Limited.

Company Established On: August 12, 2016

Company Type: Private Limited Company

Chairman & Managing Director:  Anil Kumar P

Financial snapshot

Unimech Aerospace & Manufacturing IPO Analysis

Strengths and Opportunities

1. Unimech Aerospace specialises in high-precision engineering solutions, with capabilities in machining, fabrication, assembly, and testing for the aerospace, defence, energy, and semiconductor industries. 
2. It offers both "build to print" and "build to specification" services.
3. The firm operates two manufacturing facilities in Bangalore, with a capacity utilization of 94.68%.
4. Exports account for over 90% of revenue, and the company has a strong customer base in the USA, Germany, and the UK. Revenue from the USA alone was 82.55% of total revenue in H1FY25.
5. The company benefits from a strong vendor ecosystem and subcontractor management, enabling efficient scaling and quality assurance.
6. It has demonstrated strong financial performance in the last 3 years, supported by an experienced management team.
7. The company has shown significant growth in revenue and profitability, with revenue from operations growing from ₹36.35 crores in FY22 to ₹120.66 crores in H1FY25, and PAT increasing from ₹3.39 crores in FY22 to ₹38.68 crores in H1FY25.

Risks and Threats

1. Unimech Aerospace relies on contract labour, and any disruption or inability to manage labour composition and costs could negatively impact its operations.
2. The company's significant reliance on the top five customers, who contribute over 94% of total revenue, makes it vulnerable to losing these clients or reducing their orders.
3. The business model involves long gestation periods, with extended order-to-cash cycles impacting working capital requirements and liquidity.
4. With over 95% of revenue coming from exports, particularly to the US and Germany, Unimech Aerospace & Manufacturing Limited is exposed to geopolitical risks, market fluctuations, and regulatory changes in these regions.
5. A major portion of operations (around 83-89% from FY22-24) is conducted through its material subsidiary, Innomech, highlighting dependency risks.
6. The facilities are leased from the Karnataka Industrial Areas Development Board. Failure to meet land use conditions or relocate on reasonable terms could impact the company.

How to apply for the Unimech Aerospace & Manufacturing IPO?

If you are interested to invest in Unimech Aerospace & Manufacturing IPO, following are the steps to apply:

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Unimech Aerospace & Manufacturing IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Apply’
7. Accept the mandate on your UPI app

You can also pre-apply for the Unimech Aerospace & Manufacturing IPO on Upstox which usually begins a day before the IPO opens for subscription.