Unimech Aerospace IPO has 18 brokerages screaming 'buy' with GMP over 80% on last day, gets 174 times bids

In line with the strong subscription so far, Unimech Aerospace shares have been in high demand in the grey market with the GMP surging to Rs 630, which is nearly 80% higher than the IPO price. The company is offering its shares at Rs 785 at the upper end of the price band.

After sailing through on the first day of the bidding process, the initial public offer (IPO) of Unimech Aerospace, was subscribed by 174.75 times as on the final day, driven by robust demand from qualified institutional buyers (QIBs) and non-institutional investors (NIIs).

The issue attracted a subscription of 55.90 times by the retail investors and 263.16 times by the NIIs. Meanwhile, the qualified institutional buyers (QIBs) portion was subscribed by 317.63 times.

The total issue size is around Rs 500 crore, which includes a fresh equity sale of Rs 250 crore and an offer for sale (OFS) of Rs 250 crore.

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Analyst review for Unimech Aerospace IPO

Unimech Aerospace IPO received thumbs up from almost all the analysts with as many as 18 brokerages having a subscribe rating on the public offer. This is on the expectation that the company is favorably poised to meet increasing demand from global original equipment manufacturers (OEMs).

"Unimech Aerospace’s IPO presents an appealing opportunity for investors in the engineering and aerospace sectors, given its competitive valuation metrics and growth prospects," said Canara Bank Securities while assigning a subscribe rating.

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The valuation also appears to be at a discount as the issue is priced at a P/E multiple of 51.6x, taking into account FY25 annualised earnings.

About Unimech Aerospace

Unimech Aerospace is operating 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.

The global MRO market is poised for significant growth in the next 4-5 years driven by the rapid addition of new aircraft to the fleet and the setting up of a domestic MRO and manufacturing ecosystem in India.

The company is looking to expand its design and manufacturing capabilities through acquisitions. It is also scouting for organic/inorganic opportunities in the US which will expand its capacity and ability to service customers in its key market.

For the year ending March 2024, the company's revenue from operations more than doubled to Rs 209 crore, while profit also rose over 100% to Rs 58 crore.

Over the past two years, the company has demonstrated robust financial performance, with a compound annual growth rate (CAGR) of 140% in revenue, 220% in EBITDA, and 314% in PAT.

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