Unimech set for high altitudes, boarding it could be worth it
The promoter group's stake will fall to around 80% after the IPO from nearly 92%. The company operates in a niche segment with high growth potential. It has among the highest margins and returns ratios in its areas of operation. Given these factors, investors may consider the IPO.
Business: The company designs and manufactures parts including aero tooling, ground support equipment, and electro-mechanical components for aerospace, defence, energy and semiconductor sectors. It has two manufacturing facilities in Bengaluru. The company derived over 95% of revenue through exports in three years to FY24 to global original equipment manufacturers (OEMs) and their licensees across USA, UK and Germany.
Financials: The company is in the rapid growth phase. Its revenue grew six-fold to ₹208.8 crore and net profit 27 times to ₹58.1 crore between FY22 and FY24. The operating margin before depreciation and amortisation (Ebitda margin) improved to 37.9% in FY24 from 21.3% in FY21. Other companies in related businesses operated at Ebitda margins of 11-43% in FY24. Unimech reported the highest return on equity of 53.5% in FY24 among these companies. Of the total debt of around ₹67 crore, the company will repay ₹40 crore through the IPO proceeds.
Valuation: In July 2024, the company raised ₹23.8 crore through a preferential issue of shares to three institutional investors at an average price of ₹681.7 per share. The upper end of the IPO price band is 15% higher than the preferential issue price. Considering the equity after the
