Firm Overview:
Uniparts India is a worldwide producer of engineering programs and options. It is likely one of the main suppliers of programs and parts for the off-highway market in agriculture and Development, Forestry & Mining (CFM), and aftermarket sectors on account of its presence throughout 25 international locations. The corporate’s product portfolio contains precision merchandise for off-highway automobiles (OHV) core product verticals of 3-point linkage programs (3PL) and precision machined elements (PMP) in addition to adjoining product verticals of energy take-off (PTO), fabrications, and hydraulic cylinders or parts thereof. The corporate has 5 manufacturing amenities in India within the states together with Punjab, Andhra Pradesh, and Uttar Pradesh. In the US, 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 prospects.
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 international PMP market within the CFM sector in FY22, by way of worth. It additionally has long-term relationships with key prospects together with main authentic gear 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 just lately added two prospects named TSC and Kobelco Development Gear India Personal Restricted.
Monetary Observe Report: The Income from operations has remained secure regardless of the influence 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 powerful 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 international enterprise mannequin serves as an efficient answer for patrons searching for to rationalize their international sourcing and provide chain by offering them with a number of selections 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 back and forth integration reduces its dependence on exterior provide and assist providers and allows the upkeep of quality control required to service international OEMs and aftermarket gamers. It has advanced from being a part provider to being a supplier of an end-to-end answer for varied engineering wants. Its broad portfolio permits it to maneuver throughout the varied ranges of the worth chain.
Key Dangers:
OFS – The IPO is an entire provide on the market (OFS) which is able to present nothing however the itemizing advantages for the corporate. Within the provide 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 Traders named Ashoka Funding
Holdings Restricted and Ambadevi Mauritius Holding Restricted are collaborating within the OFS.
Shopper Focus Threat – Uniparts is closely depending on its key prospects. In FY22, for the 3PL enterprise, 75.7% of the overall enterprise got here from its prime ten prospects. Equally, for a similar interval, the highest ten prospects of PMP, PTO, hydraulic cylinders, and fabrication companies from 89.5%, 100%, 100%, and 100% of the phase’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. Nevertheless it doesn’t have friends in India that function within the full spectrum of its buyer base, geographical market, product vary, and worth factors. Although it doesn’t have any straight listed friends, the listed friends (the businesses which have related publicity to sure segments) based on the corporate’s RHP (Crimson Herring Prospectus) are Balkrishna Industries, Bharat Forge, Ramkrishna Forgings, and so on. At the next worth band, the itemizing market cap shall 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 Trade P/E of ~27x. Based mostly on the above views, we offer a ‘Subscribe‘ ranking for this IPO.
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