Uniparts India IPO envisages to raise Rs. 836 crore and comprises entirely of an offer for sale. The issue has been priced in the band of Rs. 548 to Rs. 577 per share. Uniparts India Ltd is into manufacturing of engineered systems and solutions. It is one of the leading suppliers of systems and components for the off-highway market in agriculture and construction, forestry and mining and aftermarket sectors.
| Bidding dates | 30th Nov – 2nd Dec ’2022 |
| Issue Size | OFS of 14,481,942 Equity shares |
| Issue Size (amount ) | ₹ 794 – 836 Cr |
| Issue Size (shares. ) | 1,44,81,942 |
| Face Value in Rs. | 10 |
| Bid Lot shares | 25 Shares |
| Price Band | : ₹ 548 – 577 |
| Issue Structure : | |
| QIB | 50% |
| NIB | 15% |
| Retail | 35%, 50.6 L shares, 292 Cr. |
| Applications for 1x Retail | 2.03 lac |
About Uniparts India
- Incorpotated in 1994, Uniparts India Limited is a manufacturer of engineered systems and solutions.
- Uniparts India is a global manufacturer of and supplier of systems and components for the off-highway market in the agriculture and CFM (construction, forestry, and mining) as well as aftermarket sectors with presence over 25 countries.
- Uniparts India Ltd. product portfolio includes core product verticals of 3-point linkage systems (“3PL”) and precision machined parts (“PMP”) as well as adjacent product verticals of power take-off (“PTO”), fabrications and hydraulic cylinders or components. Uniparts is a concept-to-supply player for precision products for off-highway vehicles (“OHVs”) with a presence across the value chain.
- Its product portfolio includes core product verticals of 3-point linkage systems and precision machined parts as well as adjacent product verticals of power take off, fabrications and hydraulic cylinders or components thereof.
- Uniparts India Ltd. has a global footprint and serves customers across countries in North and South America, Europe, Asia, and Australia. In India, it has five manufacturing facilities, two at Ludhiana, Punjab, one at Visakhapatnam, Andhra Pradesh, and two at Noida, Uttar Pradesh.
- Uniparts also has a warehousing and distribution facility at Augusta Richmond in Georgia (US)
Anchor Book: Uniparts India IPO
- Uniparts India raised Rs 250.68 crore via anchor book ahead of its initial public offering. Total 21 investors made an investment in the anchor book. Five mutual funds have invested Rs 90.8 crore in Uniparts India through a total of 9 schemes Some top anchor investors are listed below
- The mutual fund allocation represents 40.35% of the total anchor allocation.
Uniparts India IPO : Financials
| Particulars / (₹ Cr) | 3m FY23 | FY22 | FY21 | Fy20 |
| Revenue from Operations | 346.84 | 1,227.42 | 903.14 | 907.22 |
| Revenue Growth (%) | – | 35.91% | -0.45% | – |
| EBITDA as stated | 76.12 | 271.66 | 163.93 | 127.81 |
| EBITDA Margin (%) | 21.95% | 22.13% | 18.15% | 14.09% |
| Profit Before Tax | 65.19 | 229.32 | 118.56 | 74.4 |
| Net Profit | 50.52 | 166.89 | 93.15 | 62.64 |
| Restated Profit (%) as stated | 14.56% | 13.60% | 10.31% | 6.90% |
| Equity Share Capital | 44.62 | 44.62 | 44.62 | 44.62 |
| Reserves | 669.31 | 640.62 | 515.52 | 419.55 |
| Net worth as stated | 713.93 | 685.24 | 560.14 | 464.17 |
| EPS – Diluted (₹) | 11.19 | 36.98 | 20.64 | 13.88 |
| RONW (%) | 7.08% | 24.35% | 16.63% | 13.50% |
| NAV (₹) | 158.18 | 151.82 | 124.11 | 102.84 |
| ROCE (%) | 8.83% | 31.00% | 19.78% | 13.98% |
| Net Debt/EBITDA Ratio | 1.09 | 0.42 | 0.71 | 1.87 |
| Post Issue share Cap | 45.13 | |||
| FV in Rs. | 10 | |||
| IPO price | 577 | |||
| EPS post IPO FY22 | 36.98 | |||
| PE | 15.6 | |||
| Market Cap Rs. Cr. | 2604 | |||
| Market Cap/Sales | 2.12 |
Consolidated figures for q1FY23 are not available.
Salient Points: Uniparts India IPO
- This is Uniparts India third attempt at an IPO.
- Those offering shares in the OFS are promoter group entities; The Karan Soni 2018 CG-NG Nevada Trust, The Meher Soni 2018 CG-NG Nevada Trust, Pamela Soni and investors, Ashoka Investment Holdings Ltd and Ambadevi Mauritius Holding.
- 65% of OFS is by two investors fully exiting 21% holding of more than a decade.
- 30% of OFS is by the Promoters whose stake will drop from75.5% to 66.6%.
- A majority of its revenue from operations is from sales to Original Equipment Manufacturers (“OEMs”).
- International sales accounts for about 82% of its Revenues.
- Uniparts India Ltd. currently operates at ~80% utilization.
Concerns
- Demand for its products is directly related to the production and sales of off-highway vehicles (“OHVs”) by its major customers.
- OHV production and sales may be affected by general economic or industry conditions, including seasonal trends in the agricultural sector and cyclical effects in the construction, forestry and mining, (“CFM”) sector, recessionary trends in the global and domestic economies, volatility in new housing construction as well as evolving regulatory requirements, government initiatives, trade agreements and other factors
- exposed to foreign currency exchange rate fluctuations.
- Working capital intensive operations..
Comparison with Peers
Uniparts India IPO: Assessment
- The world market for 3-point linkages was estimated at USD 360 million – USD 370 million in 2021 and is expected to grow at nearly 6% – 8% between 2021 and 2026, buoyed by growth in tractor production volumes in North America, India and Europe, steady growth in China and Japan.
- The global market of PMP (precision machined parts) for articulated joints was an estimated USD 648 million in 2021. The demand for such products is expected to grow at a healthy 6% – 8% CAGR in the 5-year period between 2021 – 2026.
- In 3-point linkage systems (3PL), used in tractors, it has a 17% global market share
- In precision machined parts (PMP) used in construction equipment it is enjoying 6% global market share.
- Company looks well-positioned to capitalize on industry tailwinds.
- Uniparts India Ltd. has an installed capacity 67,000 MTPA with 5 plants in India and one plant of 5,100 MTPA capacity in US
- It has added 12,000 MTPA, which will add to its revenue FY24 onwards.
- 47% of Uniparts India Ltd. FY22 revenue was generated from US, 25% came from Europe, 13% was from India. Thus it is well diversified accross various geographies.
- Uniparts India Ltd. showed topline growth at 12% CAGR over FY17-22 and has debt from Rs. 330 cr in FY19 to Rs. 83 cr and also reduced its % cost of production.
- Uniparts India IPO is demanding PE of 15.6 x. Thus the issue seems to be fairly priced compared to peers, while it has good EDITA margins, god net margin, and 31% ROCE along with low debt,
- Companyis moving the value chains and is to end solutions provider and adding complementary products and solutions to its portfolio like Hydraulic cylinders, PTO (Power Take Off), etc.
- Uniparts India Ltd. is also entering/extending into large farm retail stores and large construction equipment market.
- GMP of the issue which is reported to have started around Rs. 150-170 range crashed for many days to a low of rs. 50 and may be ruling about Rs. 70 as of now.
- I intend to apply for Uniparts India IPO.
Uniparts India IPO: Apply or Not (My view Only)
Risk : Low
Expected Reward :Low to Moderate.
Listing Gains : Possible. Current GMP ~ Rs. 70
Hold for Medium Term: Can be OK for Long-term as well
Subscription : Expected to be moderate to high
Above are my views only. Please do your own diligence.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in 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. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.