New Swan Multitech IPO envisages to raise ₹33.11 crores entirely as fresh issue New Swan Multitech Limited is an engineering-led manufacturer of (i) complex and critical precision engineered components and parts used in automotive sector (“auto components”) and (ii) agricultural implements designed to meet the diverse needs of modern farming

About New Swan Multitech Limited:

• Incorporated in 2014, they are an engineering-led manufacturer of (i) complex and critical precision engineered components and parts used in automotive sector (“auto components”) and (ii) agricultural farm machineries designed to meet the diverse needs of modern farming (“agricultural implements”).
• Within the automotive sector, New Swan Multitech Limited manufactures, procures and supplies a range of precision machined tubular assemblies, welded assemblies, precision brackets and sheet metal parts. Their wide range of offerings in this segment includes link assembly engine hangers, hinge body covers, front cover stay components, seat catch components, fuel filler cap components, main stand complete assemblies, front fender stay assemblies, engine guard plates, rear brake arm assemblies, separator breather, cable guide assemblies, battery tray components and many other parts, that are critical for the two-wheeler vehicles and various type of brackets such as cooling recovery reservoir brackets, exhaust tailpipe brackets, fuse block brackets, floor panel brackets, air cleaner inlet hose brackets for the passenger car vehicles.
• Within the agricultural implements sector, they design, manufacture and supply a comprehensive range of agricultural implements that cater to different aspects of farming such as soil preparation, sowing, crop management, harvesting and crop residue management. Their wide range of offering in this segment includes various type of rotovators, seeders, super seeders, weeders, potato planter, potato digger, fertilizer spreader, mulcher, puddler, laser land leveller, disc ploughs and many other agricultural implements. They manufacture agricultural implements from manufacturing unit located at Village Raian, Ludhiana, Punjab.
• The auto components are manufactured at manufacturing unit based at Village Vithlapur, Ahmedabad, Gujarat, which was established in F.Y. 2015-16.
• The Promoter and CMD, Mr. Upkar Singh, possess 38 years of experience in the auto components industry and within this tenure, he has acquired approximately 9 years of experience in the agricultural implements sector.

Financials: New Swan Multitech Limited

Anchors: New Swan Multitech IPO

New Swan Multitech IPO: Salient Points

• The promoters current shareholding shall stand diluted to 73.62% from 100% at present. .
• The Net Proceeds are proposed to be utilized in the manner set forth below:

• They are an engineering-led manufacturer of (i) complex and critical precision engineered components and parts used in automotive sector (“auto components”) and (ii) agricultural implements designed to meet the diverse needs of modern farming. In Fiscal 2023, revenue from the auto components segment and agricultural implements segment accounted for 60.70% and 37.13% of the revenue from operations respectively..
• Their product portfolio has over 300 SKU’s of agricultural implements and auto components.
• They also own 5 design registrations relating to agricultural implements i.e. Mulcher, power weeder, crop planter, potato harvester and potato planter which are registered with the Patent Office, Government of India.
• In automotive segment, they supply most of the products directly to OEMs in finished (machined) condition. In the two-wheeler vertical, they have relationship spanning over 6 years with Honda Motorcycle and Scooter India (“HMSI”), which is our largest customer in terms of revenue for Fiscal 2023, over 3 years with MG Motors to which we supply passenger car components and over 3 years with Mahindra & Mahindra to which we supply agricultural implements.
• Within the domain of agricultural implements, their product distribution encompasses an extensive network of over 200 dealers, covering 11 states in India. Their reach also extends to supplying agricultural implements to notable OEMs such as Mahindra & Mahindra, John Deere India Pvt. Ltd. etc.
• They also export agricultural implements to countries like Mauritius, Russia, Kazakhstan, South Africa, Sudan and Nepal. In the six months period ended Sept.’23, fiscal 2023 and 2022, they derived 0.59%, 2.08% and 1.39% of revenue from exports.
• Clients:

• Key Performance Indicators of our Company:

• Peers:

• New Swan Multitech IPO is coming at a PE ratio of 12.7x(fy23 earnings) and 12.6x (fy24 annualized earnings)
• I intend to apply in New Swan Multitech IPO subject to availability of funds. Company compares favorably with Peers and seems to be reasonably priced.
• GMP as reported on social media has been Rs. 35-37. .
• Hem securities is the Lead Manager to the issue. The IPOs lead managed by them have given a good return to the investors. These include names like Shri Balaji Valve Components Limited, Shanti Spintex, SJ Logistics,Siyaram Recycling Industries Limited, Deepak Chemtex Limited, Paragon Fine And Specialty Chemicals, E Factor Experiences Limited, Arabian Petroleum Limited, ,Saakshi Medtech and Panels Limited, Kahan Packaging Limited, Asarfi Hospital Limited, Kaka Industries, Green Chef, Vasa Denticity, Chaman Mettalics, Hemant Surgicals, Labelkraft, Concord Control Systems Limited, Earthstahl & Alloys Limited, Silicon Rental Solutions Limited, Krishna Defence and Allied Industries, Prevest Denpro Limited etc.
• Share India Capital Services Private Limited, the other lead manager also has a good record as a Lead Manager. They have handled IPOs of Krishca Strapping Solutions Limited, De Neers Tools Limited, Quicktouch Technologies, A G Universal Limited, Exhicon Events Media Solutions Limited, Maiden Forgings Limited, Humming Bird Education Limited, Anmol India Limited.
• SME IPO are much more risky and volatile than mainboard IPOs.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.