Uniparts India Limited plans to enter the capital markets on 30 November with an offer for sale of 14.5 million equity shares of Rs 10 each, at a price band of Rs 548-577. The shares are being sold by PineBridge Private Equity; 14 American and European employees of Uniparts, who received shares as part of the company’s Employee Stock Ownership Plan (ESOP); and the promoter family.
Uniparts manufactures components for tractors (56% of sales) and construction equipment (44% of sales). Headquartered in Delhi, the company has manufacturing operations in Noida, Ludhiana, Visakhapatnam and near Chicago, in the USA. Around 86% of the company’s sales come from the USA, Europe and Japan, with 14% coming from India.Addressing a news conference in Ahmedabad on Tuesday, Uniparts Chairman & Managing Director Gurdeep Soni said his family was selling only a small portion of its holding in the company. “We are selling only to give volume to our Initial Public Offer (IPO). We will still have a 66% shareholding after the IPO,” he said.
Started in 1984 by Gurdeep Soni and his brother Paramjit Singh Soni, Uniparts began as a manufacturer and exporter of tractor replacement parts, and then began selling original parts to global tractor brands John Deere and New Holland when they entered India. Today, 82% of its turnover comes from Original Equipment Manufacturer (OEM) sales. Uniparts operates a number of warehouses in Europe, from which it supplies to the local markets. “The warehouse to customer operation has the highest profit margin (28% EBITA) since customers are willing to pay a higher price for just in time supplies. Direct sales from our factories to the customer have a lower EDITA of 10% in India and 12.5% in the USA,” said Mr Soni.
Uniparts registered an EBITA (Earnings Before Interest Tax and Amortisation) of Rs 271 crore and a Profit After Tax of Rs 167 crore on revenues of Rs 1,228 crore for the financial year 2021-22. 35% of the IPO is for retail investors (amounting to Rs 293 crore at the high end of the price band), whereas 50% is for Qualified Institutional Investors and 15% is for non-institutional investors.
Mr Soni said that the company expects to benefit from the 400 billion USD infrastructure spending plan recently announced by the American government, since it makes articulation joints that go into construction equipment. It also expects to benefit from the trend of Western companies moving their outsourcing of manufactured parts out of China.