Uniparts India makes tepid debut; falls 7% on listing

Shares of engineering systems and solutions provider Uniparts India made a weak debut on the domestic exchanges on Monday, in sync with the broader market. The stock plunged as much as 6.75% to ₹538 from its issue price of ₹577 on the National Stock Exchange (NSE) even after receiving a strong response for its initial public offering (IPO), which was fully subscribed by 25.32 times on the back of strong demand from qualified institutional buyers.

Uniparts India shares listed at a discount of 0.3% at ₹575 on the BSE and the NSE against the upper end of the IPO price band of ₹548 to ₹577 apiece. Post listing, the stock hit a low of ₹539 on the BSE, while it touched a low of ₹538 on the NSE. The market capitalisation (m-cap) dropped to ₹2,503.6 crore. In comparison, the BSE Sensex was trading 20 points lower at 62,161 levels, while the NSE Nifty was down 10 points at 18,486, tracking negative cues from Asian peers.

The initial public offering (IPO) of Uniparts India, a manufacturer of agriculture and construction equipment components, received bids for 25.67 crore equity shares against 1.01 crore shares on the offer, which fetched ₹835.6 crore at an upper price band of ₹577 per share. The quota reserved for qualified institutional buyers was subscribed 67.14 times, while the portion for high networth individuals (HNIs) received 17.86 times bids. The category reserved for retail investors got subscribed 4.63 times.

The IPO was completely an offer for sale (OFS) by promoters and existing investors, which opened for subscription between November 30 to December 2. The lot size for the IPO was 25 equity shares, which means retail investors could buy a maximum of 325 shares worth ₹187,525.

As per the offer document filed with SEBI, promoter group entities, which currently hold a 75.3% stake in the company, proposed to offload 9.75% shareholding via OFS. Among promoters, Pamela Soni sold 22 lakh shares, while The Karan Soni 2018 CG-NG Nevada Trust and The Meher Soni 2018 CG-NG Nevada Trust offloaded 11 lakh shares each.

Ahead of the IPO, the company has raised ₹250.69 crore in the pre-IPO round by allotting 43,44,582 equity shares to 21 anchor investors (including 9 schemes of 5 MFs) at ₹577 per share. The anchor book opened for a day on November 29. The key investors that participated in the issue include Nomura, Morgan Stanley, BNP Paribas, IMCO, Carmignac, Abakkus, Theleme, HDFC MF, Aditya Birla Sun Life, Nippon Life Trustee, Bajaj Allianz Life, Invesco, Mahindra Manulife, Ptimix, Carnelian Capital, ICG Q Ltd, and others.

Established in 1994, Uniparts India 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 their presence across over 25 countries. The company's 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), fabrications, and hydraulic cylinders or components.

For the June quarter of 2022 (Q1 FY23), the company reported profit after tax (PAT) of ₹50.52 crore, while total revenue stood at ₹347.76 crore. For the financial year ended March 2022 (FY22), the company posted a 79.2% year-on-year growth in consolidated profit to ₹167 crore, while it grew by 49% to ₹93 crore in FY21. Consolidated revenue from operations jumped 36% YoY to ₹1,227 crore in FY22, while it dropped 0.45% to ₹903 crore in FY21.