Upcoming IPO: Sebi clears Unimech Aerospace issue; Key notes from DRHP

As investors await further details from Unimech Aerospace, here are the key takeaways from the Draft Red Herring Prospectus (DRHP) that the company submitted to the market regulator, Sebi

Upcoming IPO: Unimech Aerospace and Manufacturing, a high-precision engineering solutions provider, is set to go public after receiving final approval from the Securities and Exchange Board of India (Sebi). The company plans to raise Rs 500 crore through an initial public offering (IPO), for which it filed papers with Sebi on August 19, 2024. 

As investors await further details from Unimech Aerospace, here are the key takeaways from the Draft Red Herring Prospectus (DRHP) that the company submitted to the market regulator

 

Unimech Aerospace IPO details

According to the Draft Red Herring Prospectus (DRHP), the Unimech Aerospace IPO will include a fresh issue of Rs 250 crore and an offer for sale of Rs 250 crore by the promoter and promoter group shareholders. The offer also includes a reservation for subscription by eligible employees.

 

 

The equity shares to be offered through the RHP are proposed to be listed on the BSE, and NSE. 

 

The offer for sale comprises equity shares worth Rs 45 crore each by Ramakrishna Kamojhala, Mani P, and Rajanikanth Balaraman, Rs 30 crore by Preetham S.V., and Rs 85 crore by Rasmi Anil Kumar.

 

The company stated in the DRHP, “The price band and the minimum bid lot for the offer will be decided by our Company, in consultation with the book-running lead managers (BRLMs).”

 

Unimech Aerospace IPO objective

The proceeds from the fresh issue will be utilised for funding capital expenditure, repaying or prepaying certain borrowings, and general corporate purposes, the company stated in its DRHP.

 

Unimech Aerospace plans to use Rs 32.59 crore to fund capital expenditure through the purchase of machinery and equipment and Rs 25.28 crore for working capital requirements. Additionally, it intends to allocate Rs 43.94 crore for capital expenditure in its material subsidiary through equipment purchases, Rs 44.71 crore for subsidiary working capital needs, and Rs 40 crore for repaying or prepaying certain borrowings.

 

Unimech Aerospace IPO Registrar, lead managers

KFin Technologies is the registrar for the issue, while Anand Rathi Advisors and Equirus Capital are the book-running lead managers.

 

Unimech Aerospace financial details

Unimech's revenue from operations surged by 121.70 per cent to Rs 208.77 crore in FY24, compared to Rs 94.17 crore in FY23. The growth was driven primarily by increased annualised capacity and a higher number of purchase orders, as stated in the DRHP.

 

Profit after tax grew by 154.84 per cent to Rs 58.13 crore in FY24, up from Rs 22.81 crore in FY23.

 

On the other hand, the company’s total expenses rose by 109.39 per cent to Rs 137.28 crore in FY24, compared to Rs 65.66 crore in FY23.

 

About Unimech Aerospace

Incorporated in 2016, Unimech Aerospace provides ‘build-to-print’ and ‘build-to-specifications’ services, which include machining, fabrication, assembly, testing, and new product development based on client requirements. According to an F&S report, the company is a leading manufacturer of complex tooling, mechanical assemblies, electro-mechanical turnkey systems, and precision components used extensively in aero-engine and airframe tooling for production, MRO (Maintenance, Repair, and Overhaul), and line maintenance activities.