Sansera Engineering Limited IPO details – Date, Price, Size, Allotment Status, Subscription

IPO-Note	Sansera Engineering Limited
Rs 734 – Rs 744 per Equity share	Recommendation: Listing Gain

Company Profile: –

Sansera Engineering Limited is 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, such as connecting rod, rocker arm, crankshaft, gear shifter fork, stem comp, and aluminium forged parts, which are critical for engine, transmission, suspension, braking, chassis and other systems for the 2-wheeler, passenger vehicle and commercial vehicle verticals. Within the non-automotive sector, they manufacture and supply a wide range of precision components for the aerospace, off-road, agriculture and other segments, including engineering and capital goods.

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Issue Details
Objects of the issue	·  To carry out the Offer for Sale of up to 17,244,328 Equity Shares by the Selling Shareholders; and ·  achieve the benefits of listing the Equity Shares on the Stock Exchanges.
Issue Size	Total issue Size – Rs. 1282.98 Cr. Offer for Sale – Rs. 1282.98 Cr.
Face value	Rs.2.00 Per Equity Share
Issue Price	Rs. 734 – Rs. 744
Bid Lot	20 shares
Listing at	BSE, NSE
Issue Opens:	14th Sep, 2021 – 16th Sep, 2021
QIB	50% of Net Issue Offer
Retail	35% of Net Issue Offer
NIB	15% of Net Issue Offer

Financial Performance:

 

 

 

Shareholding Pattern:

Shareholding Pattern	Pre- Issue	Post Issue
Promoters & Promoter Group	43.91%	36.56%
Public	56.09%	63.44%

Source: RHP, EWL Research

Strengths:

• A leading supplier of complex and high-quality precision engineered components
• Long-standing relationships with well-known OEM customers
• Well diversified business model
• Financial performance has outperformed the industry trends

Key Highlights:

• Revenue from operations has grown at a CAGR of 12.8% from FY16-21 as compared to the average CAGR of 7.4% for the top 10 listed auto-component manufacturers in India by market capitalization
• EBITDA Margin improved from 16.34% in FY20 to 18.78% in FY21
• Automotive Segment and Non- Automotive segment represent 88.45% and 11.55% respectively to the total revenue of the company
• Revenue from sales of products to the two-wheelers segment was 50.39% with Top customer Bajaj Auto Contributing 20.75%
• India is the major revenue contributor to the company contributed 64.98% of total revenue in FY21 followed by Europe of 24.99%.
• Current Ratio improved from 0.92 to 1.05 in FY21. CFO/PAT was 2.3 in FY21.

Risk Factors:

• Dependent on certain key customers, especially Bajaj, in the automotive
• Key products of the company such as connecting rods and crankshafts, are not used in battery electric vehicles and any failure to adapt to industry trends and evolving technologies may materially adversely affect Business.

Outlook:

Sansera Engineering Limited is an engineering-led integrated manufacturer of complex and critical precision engineered components across automotive and non-automotive sectors. In the two-wheeler vertical, it has relationships spanning over 20 years with HMSI and 25 fiscal years with Bajaj. Some of the recently developed products of the company include (i) suspension, rotor and aluminum forged components for internal combustion engines and electric two-wheelers and (ii) steering system components and drive train parts for ICE and hybrid passenger vehicles. The shift towards cleaner energy fuel, mainly EVs, will lead to the replacement of engine components by batteries and motors and the company may not have the ability to adequately respond to market trends, such as the penetration of battery electric vehicles in India and internationally. Post issue Promoter holding would be lower at 36.56%. At the higher price band of Rs 744, the offer is made at P/E multiple of 35.3x of FY21 EPS, which is below the industry average. Considering the risk factors, we recommend Listing Gain to the IPO.

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