Unimech Aerospace IPO: Key Details, Insights, and Risks to Consider

Unimech Aerospace Limited is set to launch its ₹500 crore initial public offering (IPO) on Monday, December 23, 2024

Unimech Aerospace IPO: Key Details, Objectives, and Analysis

Unimech Aerospace Limited is preparing to launch its initial public offering (IPO) on Monday, December 23, 2024, and it will be open for subscription till Thursday, December 26, 2024. The IPO will consist of a fresh issue of ₹250 crore and an offer for sale (OFS) worth ₹250 crore. Here are the key details and analysis to help you decide whether to invest.

About Unimech Aerospace

Unimech Aerospace is a high-precision engineering solutions provider catering to global markets. Its expertise spans complex product manufacturing across industries such as aerospace, defence, energy, and semiconductors. The company offers “build to print” and “build to specification” services, delivering customized, high-quality solutions.

Key products include:

Aerospace components: Unimech manufactures a wide range of aerospace components, including airframe assemblies, engine components, and landing gear systems, for both commercial and defence applications.

Defence components: The company produces critical components for defence equipment, including assemblies for missiles, rockets, and launchers.

Energy components: Unimech offers high-precision components for energy applications, such as nuclear power generation and oil and gas exploration.

Semiconductor components: The company manufactures precision components for the semiconductor industry, including vacuum chambers and handling equipment.

Manufacturing Facilities

Unimech operates two manufacturing units in Bangalore:

Unit 1: Located in Bommasandra Industrial Area, Phase IV, Jigani Link Road, with a built-up area of 1,04,430 sq. ft.

Unit 2: Situated in KIADB Industrial Area, Phase II, Hosur Road, with a built-up area of 1,10,340 sq. ft.

Both facilities are equipped with advanced machinery and technology to cater to the company's diverse product portfolio.

Financial Highlights

The company's revenue is heavily export-driven, with over 91% of revenue derived from international sales in FY22-24. Key markets include North America, Europe, and Asia.

IPO Objectives

The proceeds from the fresh issue will be allocated towards:

Partial prepayment or repayment of certain borrowings availed by the company.

Working capital requirements.

General corporate purposes.

Growth Potential & Industry Outlook

Aerospace Sector

Unimech is positioned to benefit from the projected growth in global aerospace markets, particularly in Asia, which is expected to account for 11,925 new aircraft by 2042. This growth is attributed to factors such as rising air travel demand, economic development, and government initiatives.

Energy Sector

The company is set to capitalize on India's renewable energy expansion and nuclear power growth, with 11 new reactors expected to add 8,700 MW of capacity. This aligns with the government's target of achieving 500 GW of non-fossil fuel energy capacity by 2030.

Risks to Consider

Unimech Aerospace's revenue is heavily dependent on exports, which exposes it to fluctuations in global economic conditions, exchange rates, and geopolitical events.

The company faces competition from both domestic and international players in the aerospace and defence markets.

IPO Timeline

The key dates for the Unimech Aerospace IPO are as follows:

Opening date for subscription: Monday, December 23, 2024

Closing date for subscription: Thursday, December 26, 2024

Allotment of shares: Monday, December 30, 2024

Initiation of refunds: Tuesday, December 31, 2024

Credit of shares to demat accounts: Wednesday, January 1, 2025

Listing on BSE and NSE: Thursday, January 2, 2025

Peer Comparison

Unimech Aerospace’s peers include Azad Engineering, Dynamatic Technologies, MTAR Technologies, Data Patterns, and Paras Defence and Space Technologies, all of which serve the aerospace and defence markets. A comparison of these companies' financials and valuations can provide insights into the relative attractiveness of Unimech Aerospace's IPO.