BackSansera Engineering IPO subscribed 11.47 times on last day
At the end of the last day of the three-day offering, the IPO attracted bids for more than 138.84 million shares compared with an issue size -- excluding the anchor book -- of 12.11 million shares
PremiumThe ₹1282 crore initial public offering of Sansera Engineering Ltd attracted bids for 11.47 times the number of shares on offer, stock exchange data showed.
At the end of the last day of the three-day offering, the IPO attracted bids for more than 138.84 million shares compared with an issue size -- excluding the anchor book -- of 12.11 million shares. At the upper end of the ₹734-744 price band for the issue, the IPO drew bids worth roughly ₹10328.99 crore.
The institutional investor category was subscribed 26.47 times receiving bids for 90.62 million shares. The non-institutional category comprising high net worth individuals was subscribed 11.37 times.
Demand from retail investors, whose investments cannot exceed ₹2 lakh in an IPO, stood at 3.15 times the 18.86 million shares on offer, exchange data showed.
The IPO is valued at 35x of FY21 earnings, which appears to be at a discount of 17% to its peers like Endurance Technologies. Notably, working capital cycle, which stood at 79 days in FY21 and steady cash flow over the years offer comfort, said Reliance Securities in its report.
Further, asset turnover ratio at 1.15x in FY21 indicates that SEL can sustain higher growth with likely improvement in automobile volume in the subsequent years. Additionally, OCF yield at 6.7% appears to be the best among peers, which offers an edge, while consistent cash generation is likely to result in strong dividend payout in the ensuing years, Reliance Securities report added.
Bengaluru-based firm is an engineering-led integrated manufacturer of complex and critical precision engineered components across automotive and non-automotive sectors.
The firm is one of the leading manufacturers of connecting rods, crankshafts, rocker arms and gear shifter forks for two-wheelers as well as passenger vehicles.
As of April 2021, the firm had 16 manufacturing facilities, of which 15 are in India in the states of Karnataka (Bengaluru, Bidadi, Tumkur), Haryana (Manesar), Maharashtra (Chakan), Uttarakhand (Pantnagar) and Gujarat (Mehsana), and one facility is in Trollhättan, Sweden.
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