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Unimech Aerospace and Manufacturing Limited (UMAM) is an engineering solutions provider specializing in complex tools, mechanical assemblies, and precision components for aerospace, defense, energy, and semiconductor industries. Unimech Aerospace IPO plans to raise Rs 500 crores. The issue is a combination of fresh issue aggregating to Rs 250 crores and offer for sale aggregating to Rs 250 crores.

About Unimech Aerospace and Manufacturing Limited

• Unimech Aerospace and Manufacturing Ltd was incorporated on August 12, 2016.
• They are a global high precision engineering solutions company specializing in manufacturing of complex products with “build to print” and “build to specifications” offering, which involves machining, fabrication, assembly, testing and creating new products basis the specific requirements of their clients for the aerospace, energy and semi-conductor industries.
• Unimech Aerospace operates in two business segments:
  • Aero-tooling: includes manufacturing of products for aero engine tooling and airframe tooling. This segment contributes
    large portion of the company’s revenue.
  • Precision components and other: includes precision-engineered components, electro-mechanical sub-assemblies, and ground support
    equipment.
• Between Fiscals 2022 and 6mFY25, they have manufactured 2,999 SKUs in tooling and precision complex sub-assemblies’ category and 760 SKUs in the precision machined parts category which have been, supplied to more than 26 customers across 7 countries.
• Its manufacturing capabilities include machining capabilities such as turning, milling, double column milling, electro discharge machining and grinding.
• It has two manufacturing facilities viz. Unit I at Peenya and Unit II at Devanahalli SEZ both located in Bangalore.
• Innomech Aerospace Toolings (Innomech), a material subsidiary of the company, accounts for 89.35% and 83.46% of the revenue from operation in FY24 and H1FY25.

Financials : Unimech Aerospace IPO

Anchors: Unimech Aerospace IPO:

Unimech Aerospace and Manufacturing Ltd. garnered Rs 150 crore from 18 investors at Rs 785 apiece. Out of the total allocation, 53.34% went to seven domestic mutual funds, which have applied through a total of 10 schemes. These include ICICI Prudential, Axis Mutual Fund, Motilal Oswal, Edelweiss Mutual Fund and Tata Mutual Fund. Goldman Sachs secured around 10% portion of the anchor book. HSBC, Natixis, Copthall Mauritius and Clarus Capital Group AG are other marquee foreign investors.

Salient Points: Unimech Aerospace IPO

• Promoter 91.83% stake to drop to 79.82% post the IPO.
• Use of IPO Proceeds:
  • Funding of capital expenditure for expansion through purchase of machineries and equipment by the Company.
  • Investment in the Material Subsidiary for: (i) purchase of machineries and equipment; (ii) funding its working capital requirements; and (iii) repayment / prepayment, in full or part, of certain borrowings availed by the Material Subsidiary.
  • Funding working capital requirements of the Company.
  • General corporate purposes.
• They are a key link in the global supply chain for global aerospace, defence, semi-conductor and energy OEMs and their licensees for the supply of critical parts like aero tooling, ground support equipment, electro-mechanical sub-assemblies and other precision engineered components.
• They have established a sub-contractor ecosystem with vendors who undertake aspects of their manufacturing process with lower complexity, allowing them to concentrate on critical portions of the manufacturing process.
• In July 2024, company allotted equity shares by way of preferential issue to ValueQuest SCALE Fund, Evolvence India Fund IV Ltd and Steadview Capital Mauritius. This was mainly  for pursuing inorganic opportunities.
• Company entered a strategic partnership with Dheya Engineering Technologies (DETPL) by way of a share subscription and shareholders agreement to subscribe CCP shares mounting to 30% of share capital of DETPL in tranches. In November 2024, company entered into an exclusive manufacturing agreement with DETPL for production of micro gas turbines for a period of 10 years post-commercialization.
• Peers: company has no comparable peers
• Clientele includes top aircraft global OEMs, top aero engine global OEMs and our licensees. From the Energy sector, NPCIL and other top global OEMs are their clients. Their clients include in the semi-conductor equipment manufacturing segment, the top global OEMs are their clients. Some notable clients include:
  • HYDRO Systems GmbH & Co. Kg.
  • Nuclear Power Corporation of India Limited
  • Rhinestahl Corporation etc.
• A leading exporter of aerospace components, Company has a global delivery service model for supplying products to their customers, which includes logistical support and direct export to various companies including USA and Europe.
• They have established themselves as an approved supplier for various industry leaders in aerospace, defence, semi-conductor and energy sectors.
• Orders in hand as on September 30, 2024, were Rs 80 crore. The delivery timeline ranges between 4 to 16 weeks.
• PE (FY25 annualized) – 51x ; PE FY24 68x
• I intend to apply in Unimech Aerospace IPO They are a leading exporter of aerospace components, with exports significantly contributing to the overall revenue. They have ability to make high precision products of high complexity and a “high-mix, low volume nature”. Have taken both organic and inorgainc route for growth.
• GMP as per social media ruled about Rs. 510(65%)
• This post is exploratory and educational purposes only.
• 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.