Unimech Aerospace IPO: GMP, price band, should you apply as issue opens on Monday

Unimech Aerospace IPO: The initial public offering (IPO) of engineering solutions company Unimech Aerospace and Manufacturing Ltd is set to hit Dalal Street next week. The ₹500-crore worth Unimech Aerospace IPO is a mainboard IPO and the equity shares of the company will be listed on both the stock exchanges – BSE and NSE.

Unimech Aerospace and Manufacturing is a manufacturer of complex tools like mechanical assemblies, electro-mechanical systems, and components for aeroengine and airframe production. The engineering solutions provider has its clients in the aerospace, defense, energy, and semiconductor industries.

Let us check Unimech Aerospace and Manufacturing IPO details, GMP, review as issue opens tomorrow.

Unimech Aerospace IPO Details

The bidding for Unimech Aerospace IPO will commence on Monday, December 23, and conclude on Thursday, December 26. The IPO allotment is expected to be finalized on December 27 and the IPO listing date is likely December 31. Unimech Aerospace shares will be listed on BSE and NSE.

Unimech Aerospace IPO price band is set at ₹745 to ₹785 per share and the IPO lot size is 19 shares. The minimum investment amount required by retail investors is ₹14,915. The company plans to raise ₹500 crore at the upper-end of the price band of the book built issue which is a combination of fresh issue of 31.84 lakh equity shares aggregating to ₹250 crore and an offer-for-sale (OFS) component of similar number of shares worth ₹250 crore.

The company has already raised ₹149.5 crore from anchor investors ahead of its IPO opening tomorrow. Unimech Aerospace allocated 19,05,094 equity shares at ₹785 per share on Friday, December 20, to the 18 anchor investors.

The company intends to utilise the net issue proceeds for funding of capital expenditure, working capital requirements, investment in the material subsidiary and for general corporate purposes.

Anand Rathi Securities and Equirus Capital are the book running lead managers of the Unimech Aerospace IPO, while Kfin Technologies is the IPO registrar.

Unimech Aerospace IPO GMP Today

Unimech Aerospace and Manufacturing shares are showing a bullish trend in the unlisted market with a strong grey market premium (GMP). According to stock market observers, Unimech Aerospace IPO GMP today is ₹482 per share. This means that in the grey market, Unimech Aerospace shares are trading higher by ₹482 than their issue price.

Unimech Aerospace IPO GMP signals that the stock is trading at ₹1,267 apiece in the grey market, a premium of over 61% to the IPO price of ₹785 per share.

Unimech Aerospace IPO Review

Unimech Aerospace and Manufacturing Ltd operates in a niche segment of aero tools and precision component manufacturing with applications in the aircraft Maintenance, Repair and Overhaul (MRO), defence, semiconductor and energy industries. Based on its future prospects and cheaper valuations as compared to its peers, most analysts have recommended subscribing to the Unimech Aerospace IPO.

“At the upper price band of ₹785, the company is valued at FY25 annualized P/E multiple of 51.6x on post issue capital which is at a discount to its peers. We recommend investors to subscribe to the issue at the cut-off price,” said SBI Securities.

Abhishek Pandya, Research Analyst at StoxBox noted that as of September 2024, the company had an order backlog valued at ₹807.52 million, with delivery timelines ranging from 4 to 16 weeks.

“The issue is valued at a price-to-earnings (P/E) ratio of 59.3x on the upper price band based on FY24 earnings, which is comparatively lower than its peers. Considering the company’s strong financial performance, industry tailwinds & attractive valuation, we recommend a “SUBSCRIBE” rating for this issue,” said Pandya.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.