Unimech Aerospace Share Price: Rival Of HAL, Lists At 90% Premium On BSE; New Defence Stock Attractive To BUY?

Unimech Aerospace and Manufacturing share price is the new entrant on BSE and NSE, competing against PSU giants like Hindustan Aeronautics (HAL) in the defence basket. Unimech makes a strong premium listing of 90% on BSE and 86% on NSE compared to its IPO issue price. However, the stock price corrected slightly after an hour of the market debut.

Unimech Aerospace Share Price BSE:

On BSE, Unimech debuts under the 'B' category. The stock is listed at Rs 1491 apiece, which is an 89.9% premium from its IPO price of Rs 785 apiece. Notably, the listing price is its new 52-week high, while its 52-week low is marked at Rs 1,350.40 apiece.

Currently, Unimech is trading with a market capitalisation of Rs 6,895.18 crore, which makes it a smallcap, unlike its peer HAL which is the largest defence company in India in terms of market share.

At the time of writing, Unimech traded at Rs 1343.55 apiece, down by 10% from its opening price on BSE, but higher by 71.2% from its IPO price.

Unimech Aerospace Share Price NSE:

Here, Unimech is listed at an 85.98% premium to Rs 1,460 apiece compared to its IPO price. The stock did rally to hit a new 52-week high of Rs 1,485 apiece before correcting.

It is currently trading at Rs 1,353.90 apiece, which is near its 52-week low of Rs 1,351 apiece. The latest price is down by 7.3% from its opening price, but higher by 72.5% from its IPO price.

Unimech Aerospace launched its Rs 500 crore IPO from December 23 to December 26th. The 100% book building had a price band of Rs 745 per share to Rs 785 per share. On the final day of its issue, the IPO oversubscribed by 175.31x, making it one of the best-performing mainboard IPO in 2024.

Some of the key fundamentals of the IPO, as per Trendlyne data are --- Debt to Equity Ratio of 0.27 is less than 1 and healthy, which implies that its assets are financed mainly through equity. Return on Equity(ROE) for the last financial year was 53.53%, more than 20% in the last financial year, indicating an efficient use of shareholder's capital to generate profit. Additionally, Interest Coverage Ratio is 26.05, higher than 1.5, which means that it is able to meet its interest payments comfortably with its earnings (EBIT).

Earlier, in its IPO note, KR Choksey said, that Unimech Aerospace and Manufacturing Limited is a niche player specializing in the manufacturing of Aero-tooling products, which contributed 99% to its total revenue in FY24. Over the past two years, Unimech has achieved a remarkable revenue CAGR of 140% between FY22 and FY24, underscoring its ability to scale its business rapidly. The company demonstrates strong efficiency
with an EBITDA margin of 38%, PAT margin of 28%, and ROE and ROCE of 54% in FY24.

Further, the brokerage added, that the company's focused approach on a niche sector like Aero-tooling ensures continued relevance and growth opportunities in both domestic and international markets. The combination of growth rates, strong margins, and a reasonable valuation makes it a good investment opportunity.

Unimech Aerospace is a global high-precision engineering solutions company specializing in manufacturing of complex products for major original equipment manufacturers (OEMs) and their licensees worldwide in aerospace, defence, energy, and semiconductor industries.