Maini Precision Products IPO : 7 things to know
Maini Precision Products Ltd, which manufactures precision products for the aerospace, industrial and automotive industry, had filed its draft red herring prospectus (DRHP) in December 2021 and SEBI is yet to give its observations and approve the IPO for further process. Maini Precision Products Ltd will be in a position to announce the dates of its IPO only after the SEBI approval.
The Maini Precision Products IPO will be a combination of a fresh issue of shares and an offer for sale of shares by existing early shareholders of the company and its promoters.
7 important things to know about Maini Precision Products IPO
1) Maini Precision Products Ltd has filed for an IPO with SEBI for an IPO of Rs.900 crore which comprised of a fresh issue and an offer for sale of shares. The actual value of the IPO would only be known once the price band is fixed and what we have now is only the indicative value for the IPO.
Maini Precision Products Ltd manufactures specialty products for use in the aerospace, automotive and industrial segments and boasts of a very marquee client list at this point of time.
2) Let us focus on the offer for sale component first. As stated earlier, the price band is not fixed, so the precise value of the OFS is not yet known. However, what we do know is that the OFS will comprise of the issue of 2,54,81,705 equity shares or 254.82 lakh shares approximately.
Among those tendering shares in the OFS, promoters will offload 60.21 lakh shares, individual shareholders will sell 6.46 lakh shares, other selling shareholders will sell 5.13 lakh shares and early investors in the company will sell 183.01 lakh shares as part of the OFS.
The OFS will not be capital dilutive or EPS dilutive. However, it will result in shift in investors base and bigger free float post the IPO.
3) The fresh issue component will comprise of Rs.150 crore raised by the infusion of fresh equity funds into the company. These funds will be predominantly used to repay the debt of the company and a small portion of the funds will also be used for general corporate purposes.
Since the total issue size is pegged at Rs.900 crore and fresh issue portion is Rs.150 crore, the offer for sale would be worth Rs.750 crore. The fresh issue portion will result in fresh fund infusion into the company but will be capital dilutive as well as EPS dilutive.
4) Maini Precision Products Ltd operates across 3 principal verticals that are focused on precision parts for the aerospace segment, automotive segment and the industrial segment. It had ventured into aerospace precision parts only in the year 2004.
Its product portfolio comprises of precision products that are custom manufactured for clean internal combustion engines, fuel injections, transmissions and hydraulics. In addition, its precision products also find applications in industrial engineering, agriculture and legacy automotive segments.
5) Maini Precision Products has a very solid client base spread across the three verticals. Let us look at aerospace first. Maini Precision Products counts among its clients well-known names like Safran Aircraft Engines, Marshall Aerospace, Eaton Aero, ITP Externals SLU, Parker Aerospace and Woodward Inc etc.
Apart from the aerospace vertical, some of its clients in the industrial and automotive segment include names like Bosch of Germany, Eaton Vehicle Group of the US, Danfoss of Denmark, Marelli Powertrain India, Volvo Group of Sweden, Cummins India and BorgWarner Cooling Systems. This is just a partial list of clients of the company.
6) The company, Maini Precision Products, has a strong export franchise and exports to the US, France, Sweden, Italy, Slovakia, England, Japan, Spain, Poland and Germany. Fir FY21, the company reported lower revenues of Rs.427.36 crore due to the lag effect of the pandemic with 66.23% of these sales coming from exports.
Automotive components account for 60% of the revenues of Maini Precision Products. Precision engineering franchise is expected to log a 9-11% compounded annual growth rate (CAGR) between FY21 and FY25, driven by export demand as well as the big opportunity opened by Atma Nirbhar Bharat and the Make in India program.
7) The IPO of Maini Precision Products Ltd will be lead managed by ICICI Securities and IIFL Securities. They will act as the book running lead managers or BRLMs to the issue.
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