Aerospace startup Unimech to raise ₹500 cr at price band of ₹745-785, IPO to open on Dec 23

In a fresh development in the primary market, Bengaluru-based aerospace startup Unimech Aerospace and Manufacturing is set to hit Street early next week. The company, engaged in the manufacturing of complex tools and components for aeroengine and airframe production, has fixed a price band at ₹745-785 for its initial public offering (IPO), which is a combination of fresh issue and offer for sale.

The aerospace company, which competes with listed peers such as Azad Engineering, Dynamatic Technologies, MTAR Technologies, Paras Defence & Space Technologies, looks to raise a total of ₹500 crore at a market value of around ₹3,992 crore. The issue is a combination a fresh equity issue of up to ₹250 crore and an offer of sale (OFS) of ₹250 crore by promoters.

The issue will open for subscription on December 23 and closes on December 26, while the anchor book will open for a day on December 22. The tentative date for listing of shares on the BSE and NSE is December 31, 2024.

The lot size for retail investor is 19 shares and in multiples thereafter. The minimum application amount is ₹14,915 for one lot and the maximum is ₹1,93,895 for 13 lots (247 shares).

As per the IPO document filed with the SEBI, the company has reserved half of the issue for qualified institutional buyers (QIB), 15% for non-institutional investors (NII), and remaining 35% for retail investors.

The capital raised from the fresh equity will be used to meet capital expenditure for expansion through purchase of machineries and equipment; and investment in the material subsidiary. A part of the fund will be used to meet working capital requirements, and general corporate purposes of the company.

Established in 2016, Unitech Aerospace and Manufacturing is a manufacturer of complex tools like mechanical assemblies, electro-mechanical systems, and components for aeroengine and airframe production. As of March 31, 2024, Unimech operates two manufacturing facilities, Unit I and Unit II, in Bangalore, covering a total area of over 1,20,000 square feet. As of June 30, 2024, Unimech has an order in-hand of ₹99.24 crore, with delivery timelines ranging from 4 to 16 weeks.

On the financial front, its revenue stood at ₹208.77 crore in FY24, up 122% from ₹94.17 crore in fiscal 2023, primarily driven by increase in its total annualised capacity and number of purchase orders. The profit after tax grew 154.83% to ₹58.13 crore in FY24, from ₹22.81 crore in the previous fiscal. The company generates 91% of its revenue from export sales, primarily from Unites States, and remaining 9% from domestic market.

Unimech’s product range includes engine lifting and balancing beams, assembly, disassembly and calibration tooling, ground support equipment, airframe assembly platforms, engine transportation stands, mechanical and electro-mechanical turnkey systems, as well as precision components.

Between fiscals 2022 and 2024, Unimech produced 2,356 tock-keeping units (SKUs) in the tooling and precision complex sub-assemblies’ category and 624 SKUs in the precision machined parts category, serving more than 26 customers across 7 countries.

Anand Rathi Advisors Limited, and Equirus Capital Private Limited are the book-running lead managers to the issue and KFin Technologies Limited is the registrar to the offer.