Uniparts India makes weak debut; sheds 7% against issue price post listing

Post listing, the stock of industrial products company slipped to Rs 538, a 7 per cent discount to its issue price on the NSE.

Uniparts India has made a weak stock market debut, with its shares listed at Rs 575, marginally below the issue price of Rs 577 per share on the National Stock Exchange (NSE) and the BSE.

Post listing, the stock of industrial products company plunged to Rs 538, a 7 per cent discount to its issue price on the NSE. At 10:10 AM; ; Uniparts India quoted at Rs 552, still 4 per cent lower against its issue price. In comparison, the benchmark indices were down marginally by 0.7 per cent. A combined 3.8 million shares changed hands on the NSE and BSE.

Uniparts India is a global manufacturer of engineered systems and solutions for precision products for off-highway vehicles in the agriculture and construction, forestry and mining sectors with a presence in over 25 countries. It has 5 manufacturing units in India and 1 in the US. The company is a concept-to-supply player for precision products for off-highway vehicles (OHVs), with presence across the value chain.

The company enjoys significant Global Market share and has presence in key markets worldwide, including North and South America, Europe, Australia, Japan and India. It also serves some of the largest global companies and has long-term relationships with key global customers, including major original equipment manufacturers.

The objects of the offer was to achieve the benefit of listing the equity shares on the stock exchanges as well as provide an exit option, especially to investor selling shareholders as well as promoters and some of individual selling shareholders.

Most of the brokerage houses had ‘Subscribe’ rating on IPO as it was priced reasonably given its robust financials. Huge capex plans of the government in India and the US are key positives, the brokerage firms had noted. 

With its global leading position in the off-highway market, it is well placed to capture the growing industry opportunity in the tractor and construction equipment space. Its efforts to move up the value chain have led to strong earnings delivery and expanded the addressable market and customer base, Motilal Oswal Financial Services said.

The firm’s sales and net profit have grown at a CAGR of 16 and 63 per cent, respectively, over FY20-22, led by impressive improvement in EBITDA margins, which were 21.8 per cent in FY22 with return on capital employed (ROCE) at 27 per cent. The issue is reasonably valued given the healthy financials, ICICI Securities said in its IPO note.