Sansera Engineering listed on September 24 at Rs 811.50, a 9 percent premium to the issue price of Rs 744 per share. The stock opened at Rs 811.35 on the BSE, while the opening price on the National Stock Exchange was Rs 811.50. Sansera Engineering IPO was subscribed times 11.47 times. Investors put a bid of over 13.88 crore shares against the total issue size of over 1.21 crore shares, according to the data available at the stock exchange.
The Rs 1,283-crore Sansera Engineering IPO opened for subscription during September 14-16. The price band was fixed at Rs 734-744 per share. The portion allocated for the qualified institutional buyers (QIBs) was subscribed 26.47 times, while those of non institutional investors was booked a 11.37 times. The part set aside for retail investors was subscribed 3.15 times. Sansera Engineering IPO is entirely an offer for sale (OFS) of 17,244,328 equity shares by the selling shareholders. The auto manufacturing company will not directly receive any proceeds from the IPO.
Ahead of the listing, Sansera Engineering stock was trading at Rs 35 in the unofficial market. The grey market premium of Sansera Engineering IPO was commanding a price of Rs 775, over the higher end of the issue price.
On pricing of Sansera Engineering IPO, Choice Broking said in a note, “At the higher price band of Rs744, the issue 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, likely strong revenue growth and healthy EBIDTA margin over 15 per cent to boost profitability in coming future."
Sansera Engineering Limited is one of the top 10 global suppliers of connecting rods within the light vehicle segment and global suppliers of connecting rods within the commercial vehicle segment for CY 2020. With 16 manufacturing units spread across the country and outside, the Bengaluru-based company is one of the leading manufacturers of (i) connecting rods, crankshafts, rocker arms and gear shifter forks for two-wheelers and (ii) connecting rods and rocker arms for passenger vehicles. It is also the largest supplier of connecting rods and rocker arms to passenger vehicle OEMs in India.
Sansera Engineering Limited’s business witnessed marked recovery from the impact of Covid-19 led complete lockdown in H1FY21. Revenue grew by 37 per cent year-on-year to Rs 910 cr H2FY21. Margin trend also remained at satisfactory level. It also reported EBIDTA margin at 17.6 per cent and NPM at 7.1 per cent in FY21 compared to peer average of 14 per cent and 7 per cent. RoE was stood at 12.5 per cent in FY21 which is expected to improve with expansion in revenue growth, Choice Broking said.
“Sansera Engineering Limited has strong credentials like the long-standing relationship of over 20-30 years with the likes of Honda Motorcycle and Scooter India, Bajaj, and Maruti. The company’s revenue growth numbers are far ahead of the auto industry production volumes for 2Ws and PV which is on account of its ability to develop new products, new customer additions over the past three years as well and an increase in the share of new products to existing clients. Focus on non-auto has also aided volume growth for the company. We believe that a rebound in auto production volumes in India as well as globally along with steady wallet share gains and would support volume growth going ahead. We have a Subscribe rating on the Sansera IPO," said Milan Desai, lead equity analyst, Angel Broking.
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