Price Band, GMP, Quota, Should You Subscribe?

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Uniparts India IPO Opens Today: The initial public offering of engineering systems and solutions provider Uniparts India has been opened for public subscription on Wednesday till December 2. The price band for the Rs 836-crore IPO has been fixed at Rs 548-577 a share. The company on Tuesday raised Rs 251 crore from anchor investors ahead of its initial share sale. Here’s what investors should know about this IPO:

Uniparts India IPO: Issue Size, Price Band and Listing

The IPO is entirely an offer-for-sale (OFS) of 14,481,942 equity shares by promoter group entities and existing investors. At the upper end of the price band of Rs 577, the public issue is expected to fetch Rs 836 crore. The price band for the Rs 836-crore IPO has been fixed at Rs 548-577 a share.

Those offering shares in the OFS are promoter group entities — The Karan Soni 2018 CG-NG Nevada Trust, The Meher Soni 2018 CG-NG Nevada Trust, Pamela Soni — and investors — Ashoka Investment Holdings Ltd and Ambadevi Mauritius Holding Ltd.

The company will be listed on December 12 on both NSE and BSE.

Uniparts India IPO: Quota for QIB, NII and Retail Investors

For the IPO, Uniparts India has reserved 50 per cent of the issued for qualified institutional buyers (QIB). The company has fixed 15 per cent quota for non-institutional investors (NII) and 35 per cent quota for retail investors.

Investors can bid for 25 shares and in multiples thereof. Since the IPO is entirely an OFS, the company will not receive any proceeds from the public issue.

Uniparts India IPO GMP

As per market observers, the unlisted shares of Uniparts India are currently trading at a premium of Rs 71 in the grey market, over its upper band of Rs 577. It means that the company’s shares in the grey market are trading at Rs 648 apiece. Though the price is lower than previous day, it is still 12.3 per cent higher than the maximum issue price. The GMP indicates that the expected listing price of the company’s shares is going to be higher as againt the issue price. The premium gets fluctuated based on the sentiments in the markets.

Should You Subscribe To Uniparts India IPO? 

Choice Broking said Uniparts has better profitability and return ratios compared to the peer average. “Considering the global policy tailwinds like massive infrastructure capex planned by the major economies, improving mechanisation in the agriculture and global biasness towards “China plus” strategy, we feel the company has adequate levers to expand its business at higher rates. Thus, we assign a “SUBSCRIBE” rating for the issue,” it said.

KRChoksey Shares & Securities said that considering the upper limit of the price band and FY22 EPS, Uniparts IPO is valued at a P/E multiple of 15.6 times. This is at the lower end when compared to multiples at which the listed peers are trading.

“Considering the industry growth opportunities, differentiated offerings of Uniparts, expansion of the addressable market and focus on value addition, we recommend that Uniparts India Limited IPO be rated ‘SUBSCRIBE’,” it said,” it added.

About Uniparts India

Uniparts India is a global manufacturer of engineered systems and solutions. It is one of the leading suppliers of systems and components for the off-highway market in agriculture and construction, forestry and mining and aftermarket sectors on account of its presence across over 25 countries.

It is a concept-to-supply player of precision products for off-highway vehicles with presence across the value chain. The company’s product portfolio includes core product verticals of 3-point linkage systems and precision machined parts as well as adjacent product verticals of power take off, fabrications and hydraulic cylinders or components thereof.

This is the company’s third attempt to go public. Earlier, Uniparts had filed its IPO papers with Sebi in December 2018 and in September 2014. It also obtained the regulator’s clearance to launch the IPO on the two occasions but did not go ahead with the initial share sale.

Axis Capital, DAM Capital Advisors and JM Financial are the book running lead managers to the issue.

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