Unimech Aerospace IPO opens on December 23: Check price band, lot size, business model and other key details

Unimech Aerospace and Manufacturing Ltd is set to launch its ₹500-crore initial public offering (IPO) next week on Monday, December 23.

The mainboard offer comprises both a fresh issuance and an offer-for-sale (OFS) of ₹250 crore each. The company has fixed the price band for the IPO at ₹745 to ₹785 per share, with the lot size being 19 units for retail investors.

The IPO subscription will close on Thursday, December 26. The share allotment status for the IPO is expected to be finalised on Friday, December 27.

Unimech Aerospace and Manufacturing shares are expected to be listed on the BSE and the National Stock Exchange of India (NSE) on Tuesday, December 31.

If you are planning to invest in the Unimech Aerospace IPO, here are all the important details you need to know beforehand.

Business Model

Unimech Aerospace is an engineering solutions company specialising in manufacturing and supply of critical parts such as aero tooling, ground support equipment, electro-mechanical sub-assemblies and other precision engineered components for aerospace, defence, energy and semiconductor industries.

The company possesses ‘build to print’ capabilities, wherein it manufactures products based on client designs, and ‘build to specifications’ capabilities, wherein it can assist clients in designing the products to be manufactured based on specifications.

Unimech Aerospace also supplies high precision and critical components to major original equipment manufacturers (OEMs) and their licensees worldwide. Its export-oriented business boasts of a diverse product portfolio.

Promoters of the company are Anil Kumar P, Ramakrishna Kamojhala, Mani P, Rajanikanth Balaraman and Preetham S V.

Strengths

• Unimech Aerospace has advanced manufacturing capabilities and it is capable of delivering high precision engineering solutions.
• It is a digital-first manufacturing company with a robust infrastructure facilitating seamless integration of operations. It deploys a range of digital manufacturing systems that integrate the complete process from order origination to order delivery.
• The company claims it is the fastest growing company, having recorded the highest revenue growth among peers in terms of compounded annual growth rate (CAGR) between FY 2022-23 and FY 2024-25.

Weaknesses

• The business has a longer gestation period wherein, there is considerable time gap of 7 to 28 weeks between the receipt of order and the payment, thereby affecting the company’s working capital requirements.
• The company’s business is dependent on exports and the performance of geographies where it supplies its products. Any adverse changes in the conditions affecting the industries in global markets, including the key markets such as the US and Germany, can adversely impact Unimech Aerospace.
• The company is dependent on our top five customers who contributed 96.8% to its total revenue from operations in fiscal 2024. Loss of any of these customers or a significant reduction in purchases by any of them could adversely affect its business.

Key competitors

Some of the key competitors of Unimech Aerospace include names like Azad Engineering Ltd, Dynamatic Technologies Ltd, MTAR Technologies Ltd, Paras Defence, Data Patterns, Jaivel Aerospace Pvt. Ltd, Jendamark India Pvt. Ltd, Jaisara Tooling Systems Pvt Ltd and TechEra Engineering India Ltd.

Financials

Unimech is the one of fastest-growing companies, having recorded revenue growth with a CAGR of 139.7% between fiscal years 2022 and 2024.

Use of proceeds

Unimech Aerospace said that the net proceeds from the fresh issuance would be used to fund capital expenditure for expansion through purchase of machinery and equipment. A portion of funds would also be used for investment in its material subsidiary to fund its capital expenditure and working capital requirements and for repayment/prepayment, in full or part, of certain of its borrowings. The remaining funds would be used for general corporate purposes.