The premium for Uniparts India has been correcting recently and is currently hovering around Rs 40 apiece over the issue price of Rs 577 apiece. It was around Rs 60-65 earlier. This is suggesting a soft landing for the company.
Analysts tracking the grey market said muted financial performance, less-than expected subscription and the latest volatility in broader markets are denting the listing prospects of the company.
Abhay Doshi, co-founder, UnlistedArena, said the company’s margin has remained under pressure and the growth has not been very impressive lately. He expects an up to 10% listing pop from the issue.
Also, the issue did not receive a robust subscription despite being an average offering, he added. “Furthermore, the latest round of correction is also affecting the premium for the company in the grey market.”
The Rs 835.6-crore IPO of Uniparts India was sold in the range of Rs 548-577 per share, and was overall subscribed over 25.3 times in the three-day bidding process between November 30 and December 2.
The quota reserved for qualified institutional buyers was subscribed 67.14 times while the one for non-institutional investors and retailers was subscribed 17.86 times and 4.63 times, respectively.
Despite the grey market signaling a single-digit listing pop, some market analysts remain positive on the counter, suggesting holding it as a long-term play.
Manish Khanna, Co-Founder, Unlisted Assets, who is bullish on the counter, has suggested IPO allottees to hold the stock with a long-term perspective.
“A solid rise in revenues, healthy rise in profits, a good runway for growth and reasonable valuations — we are positive on this stock,” he said, citing that the issue is reasonable for the investors.
Incorporated in 1994, Uniparts India is a manufacturer of engineered systems and solutions. It is a concept-to-supply player for precision products for off-highway vehicles.
The company has five manufacturing facilities, two at Ludhiana (Punjab), one at Visakhapatnam (Andhra Pradesh) and two at Noida (Uttar Pradesh). It also has a manufacturing, warehousing and distribution facility at Eldridge (US).
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
