Check Sansera Engineering IPO (Sansera Engineering Limited IPO) details. Find IPO Date, Price, Allotment Date, Grey Market Premium GMP, Listing Date, Analysis and Review

Sansera Engineering IPO Review – Is it good or bad for investment?

Check Sansera Engineering IPO (Sansera Engineering Limited IPO) details. Find IPO Date, Price, Allotment Date, Grey Market Premium GMP, Listing Date, Analysis and ReviewSansera Engineering IPO (Sansera Engineering Limited IPO) Details

Bengaluru based Sansera Engineering is coming up with IPO that would open for subscription on 14th September 2021. Sansera Engineering  manufactures complex and critical precision engineered components and caters across automotive and non-automotive sectors. Company revenue and margins are fluctuating in the last 3 years. Should you invest in Sansera Engineering IPO? What are the risk factors in this IPO?  Let me do IPO review and indicate whether investors should buy or not.

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About Sansera Engineering Limited

They are an engineering-led integrated manufacturer of complex and critical precision engineered components across automotive and non-automotive sectors.

Within the automotive sector, they manufacture and supply a wide range of precision forged and machined components and assemblies. This includes connecting rod, rocker arm, crankshaft, gear shifter fork, stem comp, and aluminum forged parts, that are critical for engine, transmission, suspension, braking, chassis and other systems for the two-wheeler, passenger vehicle and commercial vehicle verticals.

Within the non-automotive sector, company manufacture and supply a wide range of precision components for the aerospace, off-road, agriculture and other segments, including engineering and capital goods.

They supply most of its products directly to OEMs in finished (forged and machined) condition, resulting in significant value addition.

Sansera Engineering IPO details

IPO Opening Date 14-Sep-21
IPO Closing Date 16-Sep-21
Issue Type Book Built Issue IPO
Face Value Rs 2 per equity share
IPO Price band Rs 734 to Rs 744 per equity share
Lot Size 20 Shares
Min Order Quantity 20 Shares
Listing at BSE and NSE
Issue Size Total Size: Rs 1,282.98 Crores
Employee Discount Rs 36 per share

Sansera Engineering IPO Prospectus (DRHP)

What are Sansera Engineering Limited competitive strengths?

1) Company is a leading engineering-led integrated manufacturer of complex and critical precision engineered components across automotive and non-automotive sectors.

2) It has a well-diversified business model.

3) Strong capabilities in design and engineering, machine building and automation resulting in continuous new product development and improved productivity, with fungibility of equipment, machinery and production lines across product families and sectors.

4) Long-standing relationships with well-known Indian and global OEM customers.

5) Company has skilled and experienced board of directors and management team, with an employee culture that emphasizes teamwork and collaboration across functions.

What are the Objects of the Offer?

1) Offer for Sale (OFS) Rs 1,282.98 Crores: Under OFS selling shareholders would sell the shares and company would not get any proceeds from the issue.

2) Achieve the benefits of listing equity shares on the stock exchanges.

Who is the promoter of Sansera Engineering Limited?

S Sekhar Vasan, F R Singhvi, Unni Rajagopal K and D Devaraj are the company promoters.

How is the company financial track record?

Here are the total assets, revenues and profits of the company in the last 3 years.

Financial Year ending / Period ending (Amt in Mns)
Particulars FY19 FY20 FY21
Total Assets 17,454.8 18,282.4 19,288.8
Revenues 16,408.1 14,731.4 15,723.6
Profit After Tax 980.6 799.1 1,098.6
Profit % 5.98% 5.42% 6.99%

Why to invest in Sansera Engineering IPO?

Here are the positive factors in this company.

1) It is India’s leading engineering-led integrated manufacturer of complex and critical precision engineered components.

2) Company is with well-diversified portfolio of segments, products, customers, and geography.

3) Sansera Engineering has strong capabilities in design and engineering, machine building and automation resulting in continuous new product development.

Risk Factors in Sansera Engineering IPO

1) Its revenues and margins are fluctuating in the last 3 years.

2) Covid-19 pandemic has impacted the business. It might impact in future too.

3) Company do not have firm commitment supply agreements with its customers. If its customers choose to source their requirements from company, it can impact the business.

4) Company business is dependent on the sale of its products to certain key customers. Loss of such customers, a significant reduction in purchases by such customers can adversely affect its business.

5) Pricing pressure from customers may adversely affect its margins.

6) Seasonal or economic cyclicality coupled with reduced demand in the verticals and sectors can impact the company business.

7) Investors should read complete risk factors indicated in the RHP before investing in this IPO.

Sansera Engineering IPO dates for subscription, Allotment and Listing

Offer Open 14-Sep-21
Offer close 16-Sep-21
Finalization of Allotment 21-Sep-21
Initiation of Refunds 22-Sep-21
Credit to Demat Account 23-Sep-21
IPO Shares Listing Date 24-Sep-21

Is Sansera Engineering IPO Price is underpriced or overpriced?

Its IPO price band is Rs 734 to Rs 744 per share.

1) On the upper price band of Rs 744 and last 3 years average EPS of Rs 18.42, the P/E ratio works out 40x.

2) If we take FY21 EPS of Rs 20.55, the P/E ratio works out 36x.

3) Means company is asking IPO price in the P/E range of 36x to 40x.

3) There are listed peers in this segment like Minda Industries trading at P/E 90x (Highest) and Endurance Technologies trading at P/E 33x (Lowest) and industry average P/E of 60x. Hence the Sansera Engineering IPO price of Rs 744 (upper price band) at P/E of 36x to 40x is reasonably priced.

What is Sansera Engineering IPO GMP?

GMP is nothing but the premium at which the shares are trading in offline market. This is just an indication about IPO price as it is unorganized market.

Sansera Engineering IPO GMP is between Rs 125 to Rs 135 per share.

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Sansera Engineering IPO – Review and Conclusion

Is it good or bad to invest in Sansera Engineering IPO?

Sansera Engineering Limited is India’s leading engineering-led integrated manufacturer of complex and critical precision engineered components (automotive and non-automotive sectors).

Company revenues and margins are fluctuating in the last 3 years.

The IPO share price is reasonably priced.

Currently the sentiment to invest in IPOs is low which we could see in the recent IPOs.

Considering all these factors, investors can AVOID this IPO as of now.

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Suresh KP

5 thoughts on “Sansera Engineering IPO Review – Is it good or bad for investment?”

  1. It was nice review , but investor can go through DHRP document to know more. i found it automotive and non-automotive vehicle part manufacturer.
    Nobody can predict till hit at secondary market.

  2. Sir, Pl. share your valuable suggestions on SME IPOs named ‘Prevest Denpro’ & ‘Markolines traffic control’ at your earliest.

    1. Check our IPO valuations section. Compared to its peers and industry average, the IPO price is reasonably priced. Major concern is about fluctuating financials + negative sentiment towards IPOs in recent days.

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