Sansera Engineering Limited incorporated on December 15, 1981, is an engineering-led integrated manufacturer of complex and critical precision engineered components across automotive and non-automotive sectors. They manufacture and supply a 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 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, they manufacture and supply a wide range of precision components for the aerospace, off-road, agriculture and other segments, including engineering and capital goods. They are one of the top 10 global suppliers of connecting rods within the light vehicle segment and commercial vehicle segment. As of July 31, 2021, they have 16 manufacturing facilities, of which 15 are in India and 1 facility in Sweden.
Promoters & Shareholding:
S Sekhar Vasan, F R Singhvi, Unni Rajagopal K and D Devaraj are the company promoters.
| Pre Issue promoter holding | 43.91% |
| Post Issue promoter holding | 36.56% |
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Public Issue Details:
Offer for sale: OFS of approx. 17,244,328 equity shares of Rs. 2 aggregating up to Rs. 1,282.98 Cr.
Total IPO Size: Rs. 1,282.98 Cr.
Price band: Rs. 734 – Rs. 744.
Objective: To carry out the Offer for Sale and to achieve the benefits of listing the Equity Shares on the Stock Exchanges.
Bid qty: minimum of 20 shares (1 lot) for Rs. 14,880 and maximum of 13 lots.
Offer period: 14th Sep 2021 – 16th Sep 2021.
Date of listing: 24th Sep 2021.
Also read : Market Outlook – September 2021
Subscribe or avoid?
India is among the top two producers of two-wheelers globally. During Fiscals 2016 to 2019, the industry’s production increased at a CAGR of 9.3%. Overall domestic two-wheeler production is expected to grow at a robust pace of 10.9% CAGR over Fiscals 2021-26 and Domestic sales volume is estimated to grow at a 11.2% CAGR over the five-year period similarly the 4-wheeler sector is also underpenetrated in India when compared to other developed economies but the country holds tremendous potential for automobile manufacturers hence this along with Indian governments various initiatives to develop of the EV sector is expected have a positive impact on the company and its business.
For the last 3 years, average EPS of Rs 18.42, P/E ratio is around 40x. On the upper price band of Rs 744 and EPS of Rs 20.55 for FY21, the P/E ratio works out to be 36x. Hence, the company is asking P/E in the range of 36x to 40x. There are listed peers such as 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 this IPO is reasonably priced. Considering all the above factors, we recommend “SUBSCRIBE” to this IPO for the medium to long term and for the possibility of listing gains.
Disclaimer:
This article should not be construed as investment advise, please consult your Investment Adviser before making any investment decision.