Sansera Engineering Private Limited started in 1981 at Bengaluru, Karnataka, 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 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 range of precision components for the aerospace, off-road, agriculture and other segments, including engineering and capital goods. They supply most of the products directly to OEMs in finished (forged and machined) condition, resulting in significant value addition by them. For Fiscal 2021, they derived 88.45%, and 11.55% of the revenue from sale of products from the automotive sector and non automotive sectors, respectively. For Fiscal 2021 they derived 64.98% of the revenue from sale of products from India and 35.02% of the revenue from sale of products from Europe, USA and other foreign countries combined. Sansera is one of the top 10 global suppliers of connecting rods within the light vehicle segment (passenger vehicles with gross vehicle weight of 3.5 tonnes or less, 'Light Vehicle') and one of the top 10 global suppliers of connecting rods within the commercial vehicle ('CV') segment for CY 2020. They have been gaining market share in connecting rods in terms of production volume (units) for (i) Light Vehicles with a global market share of 2.3%in CY 2020 compared to a global market share of 0.9% in CY 2015 and (ii) CVs with a global market share of 3.0% in CY2020 compared to a global market share of 0.9% in CY 2015. Within India, Sansera 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. Specifically, they are the largest supplier of connecting rods, rocker arms and gear shifter forks to two-wheeler OEMs in India. They are the largest supplier of connecting rods and rocker arms to passenger vehicle OEMs in India. As of July 31, 2021, Sansera had 16 manufacturing facilities, of which 15 are in India in the states of Karnataka (Bengaluru, Bidadi, Tumkur), Haryana (Manesar), Maharashtra (Chakan), Uttarakhand (Pantnagar) and Gujarat (Mehsana), and one facility is in Trollhättan, Sweden. As per financial performance, Sansera has posted total income/net profits of Rs. 1396.96 cr. / Rs. 86.75 cr. (FY18), Rs. 1640.80 cr. / Rs. 98.06 cr. (FY19), Rs.1473.13 Cr. / Rs. 79.90 Cr. (FY20) and Rs. 1572.36 Cr. / Rs. 109.98 Cr. (FY21). So company has posted consistent growth. Company has posted an average EPS of Rs. 17.89 and average RoNW of 13.78% for last three fiscals. Issue is priced at a P/BV of 4.36 as per NAV of 170.78 on 31.03.21. As per FY21 earnings, IPO is priced at P/E of around 35 and as per FY20 earnings P/E is around 48. So issue looks fully priced. As per RHP, comparison between listed peers are shown in above table. On BRLM's front, four BRLMs are associated with this IPO, and have handled around 53 IPO in last three fiscals. From last 10 IPOs, 4 are opened below issue price and remaining are opened above issue on the day of listing. As of now, all are trading above issue price. ( As on 08.09.21) As per financials, company has shown growth, RoNW is 12.31% and P/E is around 35 as per FY21 earnings, which looks fully priced. In current pandemic situation, sales of company declined. Auto sector is expected to grow at good rate in BHARAT, but EVs may gain market share in next couple of years. Performance of BRLM is good. So, we are giving NEUTRAL rating to this IPO for listing gains and long term.
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