The public issue of Sansera Engineering, which manufactures complex and critical precision engineered components automotive and non-automotive sectors, has received good demand from investors as it was oversubscribed by 11.47 times on September 16, the final day of bidding.
Investors have put in bids for 13.88 crore equity shares against the IPO size of 1.21 crore equity shares, the subscription data available on exchanges showed.
Retail investors bought 3.15 times against the portion set aside for them, while the reserved portion of employees was subscribed 1.37 times. Qualified institutional buyers have put in bids 26.47 times their reserved portion and that of non-institutional investors invested 11.37 times against the portion set aside for them.
The manufacturer and supplier of precision forged and machined components and assemblies aims to raise Rs 1,283 crore through its public issue which is a complete offer for sale by investors and promoters. So the objective of the public issue is to carry out the offer for sale of equity shares by the selling shareholders and promoters.
The company already mobilised Rs 382 crore from anchor investors on September 13, a day before the issue opening. The price band for the offer has been fixed at Rs 734-744 per share.
Also read - Sansera Engineering IPO | 10 Key things to know before subscribing
Sansera Engineering is one of the top 10 global suppliers of connecting rods within the light vehicle segment and commercial vehicle segment for CY2020. The company has strong relationships with respected Indian and global original equipment manufacturers (OEMs). They have a well-diversified portfolio of segments, products, customers and geography.
"On the valuation front, the issue is priced at P/E of 36.2x based on FY21 earnings, diluted equity shares and upper price band which is fairly priced when compared to its listed industry peers (i.e, Endurance Technologies-43.3x, Minda Industries-91.6x, Sundram Fasteners-50.4x, Suprajit Engineering-30.7x and Motherson Sumi-64.1x)," said BP Wealth.
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The brokerage further said considering the strong product portfolio, advanced manufacturing capabilities and robust track record, it has given a “subscribe” rating for the long term.
In the financial year 2020-21, the automotive sector contributed 88.45 percent and non-automotive 11.45 percent to revenue. In the 2-wheeler vertical, it has relationships spanning over 20 years with Honda Motorcycle and Scooter India (HMSI), 25 fiscal years with Bajaj Auto and over 20 years with Yamaha.
The company derived around 65 percent of its revenue from India and the rest 35 percent from other countries in FY21. Sansera is one of the major suppliers of connecting rods globally. As of July 31, 2021, they had 16 manufacturing facilities, of which 15 are in India and 1 facility in Sweden.
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