Engineered systems manufacturer Uniparts India will be the last initial public offering (IPO) to open for subscription in November.

Here are 10 key things to know before subscribing to the offer:

1) IPO dates

The public issue will open on November 30 and the bidding will continue till December 2, 2022. The anchor book opened for a day on November 29.

2) Price band

The company has fixed a price band of Rs 548-577 per share.

3) IPO size

The IPO is an offer-for-sale (OFS). The share sale is expected to fetch Rs 835.6 crore to the selling promoters and investors at the upper end of the price band. On offer will be 1.44 crore shares.

The offer will give exit to investors Ashoka Investment Holdings, and Ambadevi Mauritius Holding, which are selling their entire shareholding of 71.8 lakh shares and 21.54 lakh shares, respectively.

Among promoters, The Karan Soni 2018 CG-NG Nevada Trust and The Meher Soni 2018 CG-NG Nevada Trust will offload 11 lakh shares each, while 22 lakh shares are being offered by Pamela Soni.

Individual shareholders Andrew Warren Code, James Norman Hellene, Kevin John, Dennis Francis Dedecker, Melvin Keith Gibbs, Walter James Gruber, Wendy Reichard Hammen, Mark Louis Dawson, Bradley Lorenz Miller, Mary Louise Arp, Diana Lynn Craig, Marc Christopher Dorau, Craig A Johnson, and Misty Marie Garcia will sell a total of 7.47 lakh shares.

The offer will constitute 32.09 percent of the post-offer paid-up equity capital.

4) Objectives of the issue

Given that it is an OFS, the entire proceeds will go to the selling shareholders, and the company will not receive any money. Hence, the main objective of the offer is to list the shares of the company on the stock exchanges.

5) Lot size

Investors can apply for a minimum of 25 shares and in multiples of 25 shares thereafter. Hence, retail investors can invest a minimum of Rs 14,425 per lot and a maximum of Rs 1,87,525 for 13 lots.

Half of the OFS is reserved for qualified institutional buyers (QIBs), 15 percent for high-networth individuals (non-institutional investors), and the remaining 35 percent for retail investors.

6) Company profile

Incorporated in 1994, Uniparts India is a global manufacturer of engineered systems and solutions. It is one of the leading suppliers of systems and components for the off-highway market in the agriculture and construction, forestry and mining (CFM) and aftermarket sectors.

In FY22, its customer base consisted of over 125 customers spread across 25 countries, having long-term relationships with global OEM players.

Its 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), fabrication and hydraulic cylinders or components thereof. Its product verticals 3PL and PMP contributed 90 percent to sales in FY22.

Uniparts has five manufacturing facilities in India – two in Ludhiana (Punjab), one in Visakhapatnam (Andhra Pradesh), and two in Noida (Uttar Pradesh).

7) Financials

Uniparts India has delivered a good set of numbers in the past few years. Consolidated profit for the year ended March 2022 grew by 79.2 percent to Rs 167 crore compared to the previous year, while growth in FY21 was 49 percent at Rs 93 crore compared to FY20, driven by healthy operating performance.

Consolidated revenue from operations at Rs 1,227 crore for FY22 increased by 36 percent over FY21 but revenue in FY21 was down by 0.45 percent at Rs 903 crore compared to FY20.

America’s business contributed 46.9 percent to revenue, 25.3 percent by Europe, and India contributed 13.4 percent to the topline.

On operating performance, earnings before interest, tax, depreciation and amortisation (EBITDA) surged 125 percent to Rs 268 crore in FY22 over FY21, while the same in FY21 registered a 24 percent growth at Rs 119.4 crore against FY20. EBITDA margin expanded to 21.83 percent in FY22, from 12.21 percent in FY21, and 10.6 percent in FY20.

For the quarter ended June 30, 2022, profit came in at Rs 50.5 crore on revenue of Rs 346.84 crore.

The company has reduced its finance cost considerably year-after-year. Total debt on its book at the end of June 2022 was at Rs 114.65 crore, against Rs 127.3 crore in March 2022.

8) Promoters

Promoter, chairman and managing director Gurdeep Soni, who is in charge of the aftermarket business, has more than 30 years of experience. Another promoter and executive director and vice chairman, Paramjit Singh Soni, who is in charge of OEM business, inorganic growth and strategic initiatives, has over three decades of experience in this business.

Group chief operating officer Sudhakar S Kolli has over 25 years of experience in this business, including in general management with leadership role in operations and product development. Director Herbert Coenen has more than 35 years of experience in the international OHV market.

Currently, promoters hold a 75.54 percent stake in Uniparts India, and 22.49 percent shares are held by public shareholders, including Ashoka Investment Holdings, and Ambadevi Mauritius Holding. The remaining 1.97 percent stake is held by employees.

9) Risks and concerns

Here are some key risks and concerns highlighted by KR Choksey and ICICI Direct:

a) Segment concentration risk with agriculture and CFM segments together constituted around 95 percent of revenues as of FY22.

b) Product concentration risk with 3PL and PMP constituted over 90 percent of sales.

c) High share of international sales (>80 percent) is making it susceptible to foreign currency risks as well as exposed to global macro uncertainty

d) Downward revision in growth forecasts for the precision machine parts and construction equipment industries may impact its financials.

e) Inability to address larger markets for precision machine parts products could have an adverse impact on growth prospects.

f) Availability and cost of raw materials and labour may adversely affect Uniparts’ business, financial condition, results of operations and prospects.

g) Uniparts relies on its subsidiaries, Uniparts USA and Uniparts Olsen Inc, for expanding its share and business in the US for US-manufactured products and products from its Indian manufacturing facilities.

10) Listing date

The company will finalise the IPO share allotment by December 7 and the refunds will be credited to the bank accounts of unsuccessful investors by December 8.

Equity shares will be credited to the demat accounts of eligible investors by December 9.

The listing of equity shares on the BSE and NSE will take place with effect from December 12.

Uniparts India shares are trading at more than 15 percent premium in the grey market, an unofficial trading platform for IPO shares, analysts said.

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