Jobaaj Stories
Engineering systems company Uniparts India Ltd. made its first appearance at the bourses today as investors were disappointed by its poor performance.
Uniparts India Limited is a manufacturer of engineering systems and solutions. It is a leading supplier of systems and components for the off-highway market in agriculture, construction forestry & mining (CFM), and aftermarket sectors. They also provide end-to-end solutions in the fields of product conceptualization, design, prototyping, testing, development, and assembly to customized packaging and delivery.
The company has 6 manufacturing facilities and 4 warehousing facilities across the USA, Europe, and India. The company's products have a presence in over 25 countries.
Before the company floated its IPO on 30th November, it raised Rs 250.68 crores from investors who subscribed to its anchor book. A total of 21 investors participated in the anchor book which included Nomura Trust, HDFC Trustee Company, Aditya Birla Sun Life Trustee, Nippon Life India, Morgan Stanley, Carmignac Portfolio, Abakkus Emerging Opportunities Fund, Bajaj Allianz Life Insurance, BNP Paribas Arbitrage, Invesco India, Mahindra Manulife, Carnelian Capital, and ICG Q.
The Rs 835 crores IPO was a major hit with QIBs as their portion, which was 50% of the entire offer, was subscribed a staggering 67.14x times!! However, the interest from NIIs and RIIs was relatively dull as their portions were subscribed 17.86x and 4.63x times respectively. This meant that the entire IPO was subscribed 25.32x times!!
Analysts observed a Grey Market Premium (GMP) of Rs 45 per share or 7.8% premium. As such, they expected the stock to list at a premium and open at around Rs 620 per share or at a premium of 7.5%.
Contrary to their expectations, the stock was listed at Rs 575 per share, a discount of 0.3%. The stock managed to break even for a brief moment, only to fall back again. By 11:30, the stock had touched a low of Rs 538 per share.
The stock played in the range during the time as it was unable to reclaim its cost price during the day. Sellers were dominant during the day as it closed at Rs 539.65 per share, down 6.47% with a volume of 7.53 million.
After such a letdown, the initial investment of Rs 14,425 (25 shares x Rs 577) declined to Rs 13,492 (25 shares x Rs 539.65).
According to analysts, the stock has the potential as a long-term pick. People who wish to enter can invest at lower prices as its good financial position and continuous revenue growth make it a good pick for the long run.
Article by Aman Agarwal.
