Home / Markets / Ipo /  Uniparts India IPO: What does latest GMP suggest about listing?
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After a successful public offer, Uniparts India may complete all the necessary procedures such as allotment of equity shares, refund if any, and credit of the shares offered in the IPO this week ahead of its listing. At the grey market, on Tuesday, Uniparts IPO's GMP is unchanged at 60 per equity share. The nearly 836 crore initial public offering (IPO) closed last week with a robust appetite from institutional and high-net worth investors. The IPO oversubscribed by 25.32 times.

Uniparts is likely to carry the allotment of equity shares on December 7, while initiation of refunds and credit of equity shares to the applicant's Demat account will likely follow between December 8 to December 9. The company is expected to list next week on December 12.

A grey market is where a company's shares are offered unofficially to traders. A GMP does give a fair understanding of how a stock will be listed, however, there is no guarantee of the accuracy.

With a GMP of 60 per share, Uniparts listing can be around 637 per share (upper price band of 577 per share + Rs60 per share).

According to the red herring prospectus, Uniparts will take approximately five working days for the allotment of equity shares in the IPO and the credit of such equity shares to the applicant's Demat account with depository participants. The counting of five working days begins from the IPO's closing date.

Also, the company stated in the red herring paper that trading in the equity shares upon receipt of final listing and trading approvals from stock exchanges is expected to commence within six working days of the IPO closing date.

Uniparts IPO received a whopping 25.32 times subscription by end of December 2nd. Strong demand was seen by qualified institutional buyers as the portion reserved for this category oversubscribed by 67.14 times, while the non-institutional investors (NII) category subscribed by 17.86 times, and the retail investors category witnessed a subscription of 4.63 times against their offered size.

Uniparts launched its 835.61 crore IPO from November 30 to December 2nd at a price band of 548 per equity share and 577 per equity share. The bid lot size was 25 equity shares and in multiples thereof. For retail investors, the maximum subscription amount was set at 2 lakh. The maximum bid quantity for qualified institutional buyers (QIB) was over 1.01 crore equity shares at the lower price band of 548 per share, while the maximum quantity is over 72.40 lakh equity shares for non-institutional investors (NIIs) in multiples of 25 equity shares.

Axis Capital, DAM Capital Advisors, and JM Financial are acting as the book-running lead managers for the IPO. Link Intime India is the registrar for the offer.

Uniparts is a global manufacturer of engineered systems and solutions and is one of the leading suppliers of systems and components for the off-highway market in the agriculture and construction, forestry and mining, and aftermarket sectors on account of our presence across over 25 countries. The company has six manufacturing facilities -- five in India and 1 in the USA.

The company has a leading presence in the manufacture of 3PL and PMP products globally. In FY22, the company had an estimated 16.68% market share of the global 3PL market in terms of value and an estimated 5.92% market share in the global PMP market in the CFM sector in terms of value.

In its IPO note earlier, ICICI Direct analysts said, "Sales/PAT at UPI has grown at a CAGR of 16.3%/63.2% respectively over FY20-22, led by impressive improvement in EBITDA margin profile. UPI clocked EBITDA margins of 21.8% in FY22 with RoCE placed at ~27%. At the upper end of the price band, it is valued at ~15.6x P/E on FY22, which we believe is reasonable given the healthy financials at the company and high single-digit growth prospects across its key serving segments (3PL and PMP)."

ICICI Direct's note highlighted key triggers for future performance in Uniparts. These are:

- Leading market presence in critical vehicle systems & components space catering to the global off-highway segment (tractors, construction equipment)

- Engineering-driven, vertically integrated precision solutions provider

- Strategically located manufacturing & warehousing units across the globe to ensure seamless delivery of its products that offer scale & flexibility

- Long term relationship with key customers including global OEMs with outside India sales constituting ~80%+ of its sales

- Healthy financials: Double-digit EBITDA margin (~22%) and return ratios profile (RoCE >25%) with Debt: Equity at 0.2x as of FY22

 

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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