Firm Overview:
Uniparts India is a worldwide producer of engineering methods and options. It is without doubt one of the main suppliers of methods and elements for the off-highway market in agriculture and Building, Forestry & Mining (CFM), and aftermarket sectors on account of its presence throughout 25 international locations. The corporate’s product portfolio consists of precision merchandise for off-highway autos (OHV) core product verticals of 3-point linkage methods (3PL) and precision machined components (PMP) in addition to adjoining product verticals of energy take-off (PTO), fabrications, and hydraulic cylinders or elements thereof. The corporate has 5 manufacturing amenities in India within the states together with Punjab, Andhra Pradesh, and Uttar Pradesh. In the USA, it has a producing, warehousing, and distribution facility in Eldridge, Iowa, and a warehousing and distribution facility in Augusta, Georgia. It additionally has arrange a warehousing and distribution facility in Hennef, Germany, which serves as a base for serving its key European clients.
Objects of the Provide:
- To hold out the Provide for Sale of as much as 1,44,81,942 Fairness Shares by the Promoting Shareholders
- Obtain the advantages of itemizing Fairness Shares on the Inventory Exchanges
Funding Rationale:
Market Main Positions: The corporate has a number one place within the markets, globally. It had an estimated 16.7% market share of the worldwide 3PL market, and an estimated 5.9% market share within the world PMP market within the CFM sector in FY22, when it comes to worth. It additionally has long-term relationships with key clients together with main unique tools producers, leading to a well-diversified income base. It’s in enterprise with Bobcat, TAFE, and Kramp for greater than 15 years and with Yanmar for greater than 10 years. The corporate not too long ago added two clients named TSC and Kobelco Building Tools India Personal Restricted.
Monetary Observe Report: The Income from operations has remained secure regardless of the affect of the COVID-19 pandemic on enterprise operations. The corporate reported income of Rs.1,227 crs within the monetary 12 months 2021-22, registering a development of 35.9% over the earlier 12 months with exports accounting for almost 80% of total income. Between the monetary years, 2020 to 2022, the corporate’s income grew at a compounded annual development charge (CAGR) of 5%. For a similar interval, the PAT grew at a CAGR of 34%. The corporate has a robust stability sheet with a debt/fairness ratio of 0.20. The RoE and RoCE of the corporate for FY22 stand at 25% and 27%.
Enterprise Mannequin: The corporate’s world enterprise mannequin serves as an efficient answer for purchasers searching for to rationalize their world sourcing and provide chain by offering them with a number of decisions within the type of Native Deliveries, Direct Exports, and Warehouse Gross sales, whereas on the similar time serving to the corporate to handle its prices. Its vital integration reduces its dependence on exterior provide and assist providers and permits the upkeep of quality control required to service world OEMs and aftermarket gamers. It has advanced from being a element provider to being a supplier of an end-to-end answer for numerous engineering wants. Its vast portfolio permits it to maneuver throughout the varied ranges of the worth chain.
Key Dangers:
OFS – The IPO is an entire supply on the market (OFS) which is able to present nothing however the itemizing advantages for the corporate. Within the supply on the market (OFS), current promoters and shareholders will offload as much as 1,44,81,942 fairness shares. Promoters named The Karan Soni 2018 CG-NG Nevada Belief, The Meher Soni 2018 CG-NG Nevada Belief, and Pamela Soni, and Buyers named Ashoka Funding
Holdings Restricted and Ambadevi Mauritius Holding Restricted are taking part within the OFS.
Consumer Focus Threat – Uniparts is closely depending on its key clients. In FY22, for the 3PL enterprise, 75.7% of the whole enterprise got here from its prime ten clients. Equally, for a similar interval, the highest ten clients of PMP, PTO, hydraulic cylinders, and fabrication companies from 89.5%, 100%, 100%, and 100% of the section’s enterprise respectively.
Outlook:
There are a number of producers of various sizes serving sure segments or sub-segments of the corporate’s buyer base, throughout agriculture and CFM. But it surely doesn’t have friends in India that function within the full spectrum of its buyer base, geographical market, product vary, and value factors. Although it doesn’t have any immediately listed friends, the listed friends (the businesses which have comparable publicity to sure segments) in line with the corporate’s RHP (Crimson Herring Prospectus) are Balkrishna Industries, Bharat Forge, Ramkrishna Forgings, and so forth. At a better value band, the itemizing market cap might be round ~Rs.2600 crs and Uniparts is demanding a P/E a number of of 15x based mostly on FY22 EPS which is lower than the common Business P/E of ~27x. Based mostly on the above views, we offer a ‘Subscribe‘ ranking for this IPO.
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