Unimech Aerospace and Manufacturing's initial public offering continued to attract strong demand from investors, closing the second day with 9.09 times subscription on December 24 despite bearish sentiment in the equity markets.
The engineering solutions provider launched its maiden public issue on December 23 to raise Rs 500 crore, which comprises a fresh issue and an offer-for-sale of equity shares worth Rs 250 crore each. The price band for the offer is Rs 745-785 per share.
Investors have applied for 4.27 crore equity shares compared to the offer size of 47.04 lakh shares, the subscription data on exchanges showed.
All categories of investors showed healthy interest in the issue, which seems to be resulting in strong grey market premium. Non-institutional investors bid 12.07 times their allotted quota, and retail investors' reserved portion was booked 10.30 times, while qualified institutional buyers bought 4.64 times the part set aside for them.
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Employees picked 15.56 times their reserved portion. Unimech has reserved Rs 1.5 crore worth shares for its employees.
Unimech Aerospace IPO shares were available at more than 60 percent premium over the upper price band in the grey market, an unofficial market for trading in IPO shares till the listing, the market observers said.
The Karnataka-based engineering solutions company specialising in manufacturing and supply of aero tooling, ground support equipment, electro-mechanical sub-assemblies and other precision engineered components for aerospace, defence, energy, and semiconductor industries. It has an order book of Rs 80.75 crore, with a delivery timeline ranging between 4 to 16 weeks.
Unimech Aerospace that competes with listed entities like MTAR Technologies, Azad Engineering, Paras Defence, Data Patterns, and Dynamatic Technologies will utilise fresh issue proceeds for expansion through purchase of machineries and equipment, working capital requirements, repaying debt, and general corporate purposes.
The public issue will close on December 26, while trading in its equity shares on the bourses will commence effective December 31.
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