Rs. 1,283 cr IPO - Entirely OFS
- Rs. 1,002 cr by PE investor, reducing 53% holding to 28%
- Rs. 281 cr by 4 promoters, trimming 42% stake to just 35% post IPO.
Price band: Rs. 734-744 per share
Mcap: Rs. 3,823 cr, implying 33.6% dilution
IPO Date: Tue 14 Sep to Thu 16 Sep 2021, listing on 24 Sep 21
Grey Market Premium (GMP) of Sansera Engineering: It is an unofficial figure, against guidelines of SEBI and we are strongly against it. Know more about ‘grey market premium’ in our detailed article.
2W Focused Auto Component Player
Company derives 88% of Rs. 1,550 cr revenue from automotive sector – half from two wheeler (2W) and one-fourth from passenger vehicles (PV). Despite slowdown in auto sales in FY21 (13% and 11% fall in domestic 2W and PV segment), company’s revenue grew 6% YoY, as new products accounted for Rs. 223 cr or 14% of revenue. Share of new products may keep increasing, as company diversifies from internal combustion engine (ICE) products like connecting rods, rocker arm, crank shaft assembly, gear shifter fork to technology agnostic products like stem comp and emerging segment of electric vehicle (EV) and hybrid components.
Catering to 9 of country’s top 10, 2W OEMs like Bajaj, Honda, Hero, TVS, Yamaha, Royal Enfield, Sansera has commenced supplies to an Indian 2W-electric scooter startup in Aug 2021, having ambitious and disruptive plans. In PVs, Maruti is a key customer and company will supply critical hybrid components to a Japanese OEM from FY23.
Lockdown in initial months of FY21 resulted in average annual capacity utilization of ~60% (75-80% utilization, excluding lockdown period). Of Rs. 1,550 cr FY21 revenue, if Q1FY21’s Rs. 135 cr revenue is excluded, quarterly revenue run rate of Rs. 450 cr was maintained in the balance 3 quarters. Thus, FY22E revenue can exceed Rs. 1,900 cr, translating into 25% expected YoY growth.
Coming onto margins, EBITDA grew 23% YoY in FY21 to Rs. 295 cr, resulting in 19% margin. PAT rose 37% YoY to Rs. 110 cr, leading to EPS of Rs. 10.5, on tiny equity of only Rs. 9.4 cr (FV Rs. 2). On net worth of Rs. 878 cr as of 31.3.21, debt equity ratio reduced to 0.55 from 0.64 a year ago, with AA- credit rating is better than similar-sized recently-listed Rolex Rings (BBB-).