Sansera Engineering’s Rs 1,283-crore IPO (initial public providing) has opened for subscription and will close on 16 September 2021. So far on the initial day of bidding, Sansera Engineering IPO has been subscribed 50 per cent. In the major market place, Sansera Engineering shares have been seen commanding a premium of Rs 35 more than the IPO price tag of Rs 744, the upper finish of the price tag band. On Tuesday, shares have been trading at Rs 779 apiece, a premium of almost 5 per cent in the grey market place, according to the individuals who deal in unlisted shares of the businesses.
On Monday, Sansera Engineering allocated 51.35 lakh equity shares to 27 anchor investors and raised Rs 382.05 crore at the upper band of Rs 744 per share (like share premium of Rs 742 per equity share). Government of Singapore, Monetary Authority of Singapore, Nomura, Abu Dhabi Investment Authority, Axis Mutual Fund (MF), ICICI Prudential MF, SBI Life Insurance Co Ltd, Max Life Insurance Company and Kuber India Fund are amongst the anchor investors. Those providing shares in the OFS are current investors Client Ebene, CVCIGP II Employees Ebene and promoters — S Sekhar Vasan, Unni Rajagopal K, F R Singhvi and D Devaraj. Half of the situation size has been reserved for certified institutional purchasers (QIBs), 35 per cent for retail investors and the remaining 15 per cent for non-institutional investors.
ICICI direct Research
Rating: Unrated
Sansera Engineering clocked EBITDA margins of 17.6% in FY21 with return ratio at 10-12%. On the b/s front, as of FY21, debt to equity is at .6x. In terms of valuation, it is priced at ~35x P/E on FY21 EPS (| 21/share) at the upper finish of price tag band i.e., Rs 744. According to the brokerage firm, the essential dangers contain fFailure to adapt to market trends and evolving technologies, dependence on specific essential clients, and pricing stress from clients.
Religare Broking
Rating: Positive View
The auto element market income is anticipated to develop at a CAGR of 11.9% more than FY2021-26 to attain Rs 5,284 bn led by OEM demand, improve in production and greater outsourcing to auto element players by OEMs. Also, exports are anticipated to improve at a CAGR of 9.4% more than FY 2021-26, driven by PLI schemes, improvement in Indian security and emission norms and domestic businesses gaining technological capabilities by means of joint ventures. “We believe these factors are likely to benefit auto component players in the coming time,” it mentioned. The essential dangers are the company’s higher dependency on a couple of essential clients, and improve in raw material rates.
Kotak Securities
Rating: Not Rated
Sansera’s company model is effectively diversified by client base, finish segment, geographical spread of revenues and item portfolio. The enterprise have been suppliers to 71 clients for the duration of Fiscal 2021 as compared to 64 for the duration of Fiscal 2019 and are constantly pursuing new client relationships. Sansera derives income from several segments inside the automotive sector, like the two-wheeler, passenger automobile and industrial automobile verticals. Within the non-automotive sector, it manufactures and provide a variety of precision elements for the aerospace, off-road, agriculture and other segments, like engineering and capital goods.
Choice Broking
Rating: Subscribe
At the greater price tag band of Rs744, the situation is valued at P/E of 34.8x on FY21 EPS basis which is in line with peer avg. trailing P/E of 34x. As per our view, probably powerful income development and wholesome EBIDTA margin more than 15% to increase profitability in the coming future. The brokerage firm mentioned that investors’ sentiments stay weak towards automotive businesses amid worry of increasing competitors from electric cars (EV) players and requirement for capex requirement for EV expansion. As per the Crisil report, EV penetration in TW motorcycles will be significantly less than 1% by FY26, ~4% for PVs and ~25% for TW scooters which indicates shift towards EVs would be more gradual in the longer term.
BP Wealth
Rating: Subscribe
Sansera Engineering is one of the leading 10 international suppliers of connecting rods inside the Light Vehicle segment and Commercial Vehicle segment for CY 2020. The enterprise has powerful relationships with respected Indian and international OEM’s. They have a effectively-diversified portfolio of segments, items, clients and geography. On the valuation front, the situation is priced at P/E of 36.2x based on FY21 earnings, diluted equity shares and upper price tag band which is pretty priced when compared to its listed market peers (i.e, Endurance Technologies-43.3x, Minda Industries-91.6x, Sundram Fasteners-50.4x, Suprajit Engineering-30.7x and Motherson Sumi-64.1x). “Considering the strong product portfolio, advanced manufacturing capabilities and robust track record, we give a ‘subscribe’ rating for the long term,” it mentioned.
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