Engineered systems manufacturer Uniparts India is on December 12 expected to list at a premium of around 10 percent over the issue price.
Though the IPO, which was a complete offer of sale, was subscribed 25.32 times, has reasonable valuations and the company’s financial position is healthy, the listing premium is lower than expected, say analysts.
In the grey market, the premium has been hovering around 10 percent over the final issue price of Rs 577, which analysts blamed on market consolidation and the IPO being an offer for sale.
"Looking at the healthy response from all categories of investors, we expect a decent listing performance backed by a consolidating market mood," Prashanth Tapse, Senior VP Research, Mehta Equities, said.
Muted grey demand is justified as the issue is entirely an offer for sale (OFS), he added.
Considering its market leadership in 3PL (3-point linkage systems) and PMP (precision machined parts) products followed by unique global business model and reasonable valuations, Tapse expects the share to list at around Rs 625-635, which translates to more than 8-10 percent premium over the upper end of the IPO.
The company raised Rs 836 crore through the issue, which opened for subscription during November 30-December 2, with all the money going to the selling shareholders.
The shares set aside for qualified institutional buyers were subscribed 67 times, high networth individuals nearly 18 times and retail portion was subscribed 4.6 times.
Uniparts India is a global manufacturer of engineered systems and solutions. Its major business areas are agriculture, construction, forestry, and after-market.
"The issue received a good response from investors on both the institutional and retail sides, and the current grey market premium is Rs 60 ie around 10 percent over its issue price," Santosh Meena, Head of Research at Swastika Investmart said.
Uniparts also enjoys a healthy financial position with continuous growth in revenue and profit and improving margins, Meena said.
Uniparts India reported healthy profit at Rs 166.89 crore in FY22, up from Rs 93.15 crore in the year-ago period, and revenue also surged to Rs 1,231 crore from Rs 948 crore during the same period.
The company intends to expand into newer geographies, adjacent product verticals, acquire additional customer accounts and increase wallet share of existing customers.
It also plans to grow inorganically through strategic acquisitions and alliances. "When compared to its listed peers, the issue appears to be reasonably priced. Listing could be at par of marginally positive," Narendra Solanki, Head- Equity Research at Anand Rathi Shares & Stock Brokers said.
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