Unimech Aerospace IPO: Day 3 Subscription Status & Grey Market Premium Update

On the final day of bidding, Unimech Aerospace's initial public offering (IPO) has garnered significant interest from investors. The Bengaluru-based company is offering its shares within a price range of Rs 745-785 each, planning to raise Rs 500 crore through the IPO. The offering includes a fresh issue worth Rs 250 crore and an offer-for-sale of an equivalent amount.

As of 3:15 PM on Thursday, December 26, the IPO received bids for 69,669,821 equity shares, marking a subscription rate of 148.11 times compared to the 4,704,028 shares initially available. The bidding commenced on Monday, December 23, and concludes today.

Notably, the non-institutional investors (NIIs) segment was oversubscribed 238.23 times, while the qualified institutional buyers (QIBs) category was favoured 253.34 times. Meanwhile, employee quota saw a subscription of 85.55 times and the retail investors' portion was covered 49.89 times.

Founded in 2016, Unimech Aerospace and Manufacturing specializes in producing sophisticated tools, including mechanical assemblies and electro-mechanical systems for the aerospace sector. The company's strong market reputation is reflected in its advanced manufacturing capabilities and partnerships with global OEMs.

The grey market premium (GMP) for Unimech Aerospace's shares has soared remarkably despite market volatility, recently commanding a Rs 630 premium, suggesting an anticipated listing gain of 80%. When the IPO opened, the GMP was approximately Rs 510.

Financially robust, Unimech Aerospace has shown a revenue CAGR of 140% from FY22-24, with an industry-leading EBITDA margin of 38% and a ROCE of 57.6%. Nirmal Bang Securities highlights these factors in its 'subscribe' rating, noting competitive valuation multiples such as an EV/EBITDA of 51x and a P/E of 69x.

The company has raised Rs 149.5 crore from anchor investors by allocating 19.05 lakh shares at Rs 785 each. The break-up of the net offer includes 50% allocated to QIBs, 15% to NIIs, and 35% to retail investors.

With plans to diversify through strategic partnerships and expand its manufacturing into high-value sectors, Unimech Aerospace is gearing up for further growth. The company currently operates two manufacturing units and is developing a technology park to enhance its capabilities and capture niche markets.

Arihant Capital Markets recommends subscribing to the IPO for long-term gains, citing the company’s alignment with industry trends and focus on high-mix, low-volume products. Unimech’s shares are set to list on both BSE and NSE on Tuesday, December 31, 2024, with Anand Rathi Securities and Equirus Capital as the lead managers and Kfin Technologies as the registrar.