The Rs 1,283-crore preliminary public providing (IPO) of automotive parts producer Sansera Engineering opened for subscription on September 14 at a value band of Rs 734-744 per fairness share.
The problem, that can shut on September 16, is a whole provide on the market (OFS) of 1,72,44,328 fairness shares by present promoting shareholders.
The OFS contains the sale of 86,35,408 shares by Consumer Ebene Ltd, 48,36,723 shares by CVCIGP II Workers EBENE, 20,58,069 shares by S Sekhar Vasan, 5,71,376 shares every by Unni Rajagopal Ok, FR Singhvi and D Devaraj.
The Bengaluru-based firm is a producer of a spread of precision cast and machined parts and assemblies for the two-wheeler, passenger automobile and business automobile verticals. It’s the largest provider of connecting rods, rocker arms and equipment shifter forks to two-wheeler OEMs in India.
Learn right here: Sansera Engineering IPO to open immediately: Key issues to know
Sure analysts have suggested subscribing to the difficulty on honest valuations and the corporate’s wholesome progress prospects going forward.
On the valuation entrance, Sansera Engineering’s IPO is priced at P/E of 36.2x primarily based on FY21 earnings, diluted fairness shares and higher value band which is pretty priced when in comparison with its listed business friends i.e, Endurance Applied sciences at 43.3x, Minda Industries at 91.6x, Sundram Fasteners at 50.4x, Suprajit Engineering at 30.7x and Motherson Sumi at 64.1x.
“Sansera Engineering is among the prime 10 world suppliers of connecting rods throughout the Gentle Automobile section and Industrial Automobile section for CY 2020. The corporate has sturdy relationships with revered Indian and International OEM’s. They’ve a well-diversified portfolio of segments, merchandise, prospects and geography,” BP Wealth famous.
Contemplating the sturdy product portfolio, superior manufacturing capabilities and strong monitor report, the brokerage home has a “subscribe” score for the long run.
Sansera Engineering clocked EBITDA margins of 17.6 % in FY21 with a return ratio of 10-12 %. As of FY21, debt to fairness was at 0.6x.
In the meantime, buyers’ sentiments stay weak in the direction of automotive firms amid worry of rising competitors from electrical autos (EV) gamers and the requirement for capex requirement for EV enlargement.
As per the Crisil report, EV penetration in two-wheeler bikes might be lower than 1 % by FY26, round 4 % for PVs and round 25 % for two-wheeler scooters which signifies a shift in the direction of EVs could be extra gradual in the long run.
“Whereas SEL manufactures core parts for ICE engine, SEL intend to develop a number of technology-driven methods and parts to cater to rising alternatives within the electrification of autos. Fungibility of manufacturing strains permitting the corporate to interchange capability and product combine over product classes will even profit enterprise,” Selection Broking mentioned.
As per the brokerage, probably sturdy income progress and wholesome EBIDTA margin over 15 % will enhance the corporate’s profitability within the coming future. Selection Broking has assigned a ‘subscribe’ score to the difficulty.