Unimech Aerospace Lists at 86% Premium, Demonstrates Robust Investor Confidence on NSE and BSE

Unimech Aerospace and Manufacturing Limited, a leading provider of complex tools and precision components for the aerospace and defence industries, made a strong debut on the stock exchanges on Tuesday, December 31, 2024. The Bengaluru-based company, known for its advanced manufacturing capabilities, commenced trading on NSE and BSE, reflecting significant investor enthusiasm and confidence in its growth trajectory.

Unimech Aerospace Listing Details

The company’s debut on the stock market underscored strong investor interest and market optimism:

• Listing Time & Price: Unimech Aerospace shares opened at ₹1,460 on both NSE and BSE, delivering an impressive 86% premium over the IPO issue price of ₹785. This strong opening highlights the market’s recognition of Unimech’s cutting-edge capabilities and growth potential.
• Issue Price Context: The IPO, priced in the range of ₹745 to ₹785 per share, was strategically positioned to balance accessibility for retail investors with fair valuation of the company’s potential.
• Price Evolution: By 10:01 AM IST, Unimech Aerospace shares traded at ₹1,411.45, marking an 80% gain over the issue price. The momentum reflects sustained buying interest and positive market sentiment.

Unimech Aerospace First-Day Trading Performance

The trading session highlighted strong participation across investor categories:

• Volume and Value: In the opening hour, approximately 86,291 shares changed hands, generating a substantial turnover of ₹32.16 crore. Notably, 100% of the traded shares were marked for delivery, indicating genuine long-term investor interest.
• Demand Dynamics: The order book revealed strong buying pressure, with no significant sell orders at the upper circuit. This imbalance highlights robust confidence in Unimech’s future.

Unimech Aerospace Market Sentiment and Analysis

• Market Reaction: Immediate bullish sentiment with an upper circuit hit.
• Subscription Rate: The IPO was oversubscribed 175.31 times, with QIBs leading the charge at 317.63 times, followed by NIIs at 277.55 times, and retail investors at 59.19 times.
• Pre-listing Interest: Anchor investors showed strong confidence, investing ₹149.55 crore before the public issue, further validating the company’s market potential.

Unimech Aerospace Growth Drivers and Challenges

Expected Drivers of Future Performance:

• Advanced manufacturing capabilities with a digital-first approach.
• Established relationships with global OEMs in aerospace and defence.
• Export-driven business model with operations spanning seven countries.
• Robust vendor ecosystem ensuring seamless execution.
• Strong management team with proven operational expertise.

Potential Challenges:

• Industry-specific risks such as cyclical demand.
• High dependency on technology upgrades and innovations.
• Intense competition in the aerospace and defence sectors.
• Talent acquisition and retention in niche engineering roles.

Utilisation of IPO Proceeds

The ₹500 crore raised will be allocated as follows:

• Expansion through purchase of new machinery and equipment.
• Working capital requirements.
• Investment in a material subsidiary for machinery acquisition and debt repayment.
• General corporate purposes.

Unimech Aerospace Financial Performance

Unimech Aerospace’s financial growth has been remarkable:

• Revenue Growth: Revenue rose by 120.85% to ₹213.79 crore in FY2024 from ₹94.93 crore in FY2023.
• Profit After Tax (PAT): PAT surged by 154.86% to ₹58.13 crore in FY2024 from ₹22.81 crore in FY2023.
• Outstanding Metrics: Return on Equity (ROE) of 53.53% and Return on Capital Employed (ROCE) of 54.36% underline strong profitability.

As Unimech Aerospace embarks on its journey as a listed entity, market participants will closely monitor its ability to scale operations and maintain its technological edge. The strong listing and sustained investor interest underscore the company’s significant growth potential in the rapidly evolving aerospace and defence sectors.