Uniparts India Limited is a global manufacturer of engineered systems and solutions and one of the leading suppliers of systems and components for the off-highway market in the agriculture and construction, forestry and mining ('CFM') and aftermarket sectors on account of its presence across over 25 countries. They are a concept-to-supply player for precision products for off-highway vehicles ('OHVs') with presence across the value chain. Their product portfolio includes core product verticals of 3-point linkage systems ('3PL') and precision machined parts ('PMP') as well as adjacent product verticals of power take off ('PTO'), fabrications and hydraulic cylinders or components thereof. They have a leading presence in the manufacture of 3PL and PMP products globally on account of them serving some of the largest global companies. They had an estimated 16.68% market share of the global 3PL market in Fiscal 2022 in terms of value and an estimated 5.92% market share in the global PMP market in the CFM sector in Fiscal 2022 in terms of value. They also cater to the aftermarket segment especially for 3PL product range. They provide replacements of 3PL parts to organized aftermarket retailers and distributors in North America, Europe, South Africa and Australia. In Fiscal 2020, 2021 and 2022, and in the three months ended June 30, 2022, revenue generated from the agriculture and CFM segments together constituted 95.74%, 96.07%, 95.35% and 95.13%, respectively, of the total revenue from operations. They have long-term relationships with global OEM players in the agriculture and CFM sectors, such as Tractors and Farm Equipment Limited ('TAFE'), Doosan Bobcat North America ('Bobcat'), Claas Agricultural Machinery Private Limited ('Claas Tractors'), Yanmar Global Expert Co. Ltd ('Yanmar') and LS Mtron Limited. They service several organized aftermarket players and large farm and fleet retail store chains in Europe and the US, such as Kramp Groep B.V. ('Kramp') and Tractor Supply Company ('TSC'). In Fiscal 2022, their customer base comprised over 125 customers in over 25 countries globally. Bobcat, TAFE and Kramp are some of the customers with whom they have had relationships for over 15 years, while with customers like Yanmar, they have a relationship with for over 10 years. More recently, we have added TSC and Kobelco Construction Equipment India Private Limited ('Kobleco') as the customers. Customers they acquired in 2017 onwards, accounted for 6.97%, 11.13%, 9.73% and 9.46%, respectively of the revenue from operations in Fiscal 2020, 2021 and 2022, and in the three months ended June 30, 2022. In India, Company has five manufacturing facilities, two at Ludhiana, Punjab, one at Visakhapatnam, Andhra Pradesh, and two at Noida, Uttar Pradesh. They have also set-up a distribution facility in Noida, Uttar Pradesh. In the United States, they have a manufacturing, warehousing and distribution facility at Eldridge, Iowa, acquired pursuant to the acquisition in 2005 of Olsen Engineering LLC, now known as Uniparts Olsen Inc. ('UOI') and a warehousing and distribution facility at Augusta, Georgia. They have also set up a warehousing and distribution facility in Hennef, Germany, which serves as their base for serving their key European customers. As of June 30, 2022, company had 2,156 employees, of which 686 employees were in the regular staff category and 1,474 employees were in the regular labour category. Additionally, as June 30, 2022, they also utilized the services of 2,156 persons engaged as contract labour and 367 engaged as apprentice. As per financial performance, Uniparts has posted total income/net profits of Rs 938.84 Cr / Rs 48.20 Cr (FY20), Rs 947.69 Cr / Rs 95.57 Cr (FY21), Rs 1231.04 Cr / Rs 163.49 Cr (FY22) and 347.76 Cr / 44.83 Cr (Q1 FY23). So as per last three years data, company has shown growth. They have posted an average EPS of Rs. 28.28 and average RoNW of 19.97% for last three fiscals. Issue is priced at a P/BV of 3.65 as per NAV of 158.18 on 30.06.22. If we attribute annualized earnings of FY23, then asking price is at a P/E of around 14.52, which looks fairly priced, and if we take FY22 earnings than P/E is around 15.93. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, 3 lead managers are associated with this IPO, and have handled around 11 IPOs in last three fiscals.Axis Capital Limited: This is 43 IPO from this BRLM. From last 10 IPOs, 1 opened below issue price and remaining opened above issue on the day of listing. As of now, from last 10 IPOs, 3 are trading below issue price and other are trading above issue price. ( As on 24.11.22)DAM Capital Advisors Limited : This is 13th IPO from this BRLM. From last 10 IPOs, 4 opened below issue price and remaining opened above issue on the day of listing. As of now, from last 10 IPOs 5 are trading below issue price and other are trading above issue price. ( As on 24.11.22)JM Financial Limited: This is 34 IPO from this BRLM. From last 10 IPOs, 2 opened below issue price and remaining opened above issue on the day of listing. As of now, from last 10 IPOs 5 are trading below issue price and other are trading above issue price. ( As on 24.11.22) As per financials, Uniparts India has shown good growth, RoNW is 24.35% and P/E is respectively 15.93 and 14.52 as per FY22 and annualized FY23 earnings, which looks fairly priced. Company is in precision parts manufacturing business and the sector expected to provide good growth for next couple of years. So we expect, company will able to grow at good rate. So, we give SUBSCRIBE rating for this IPO.
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