Sansera Engineering IPO Review – Is it good or bad for investment?
Sansera 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.
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|
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)|
|Profit After Tax||980.6||799.1||1,098.6|
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
|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.
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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