Engineering & Capital Goods News

Sansera Engineering IPO GMP, Financial, Subscription; Last Chance to Invest Today


Sansera Engineering Limited completed its second day of trading for its initial public offering on Wednesday. The company had opened up the issue for subscription on Tuesday, for a three-day IPO. As the issue came to a close on the second day, September 15, the IPO saw its investors subscribe to it a total of 1.02 times. The public issue received bids for 1.23 crore shares against the IPO size of 1.21 crore shares. September 16 marks the third and final day of the Sansera Engineering IPO. The offer size itself was reduced to 1.21 crore from the earlier 1.72 crore equity shares as the company mobilised around Rs 382 crore from anchor investors a day before the IPO opened, which was September 13.

As far as subscriptions go, the retail investors were the ones who had subscribed to the issue the most with a total subscription of 1.72 times on day two of the issue. The employee category saw a subscription of 1.03 times yesterday. The qualified institutional buyers (QIBs) and the non-institutional investors (NIIs) had subscribed to the issue around 0.38 times and 0.22 times respectively over the course of the day.

The Sansera Engineering IPO has an issue size of 17,244,324 equity shares which is entirely made up of an offer for sale (OFS). The aggregation of the IPO issue size, as well as the OFS, amounts to the same Rs 1,282.98 crore. The issue has a fixed price band of Rs 734 to Rs 744 per equity share. The issue also has a face value of Rs 2 per equity share.

The grey market premium (GMP) for the Sansera Engineering IPO stood at Rs 70 at the time of this article, according to information from IPO Watch. This indicated that the issue was trading at a premium of Rs 804 to Rs 814 per equity share on the unlisted grey market.

Speaking on the company’s business model, BP Wealth said in a note, “From a product perspective, Sansera manufactures a range of components for multiple end applications across both automotive (2-wheelers, passenger vehicles, commercial vehicles) as well as nonautomotive (off-road, agriculture, engineering and capital goods, marine and others) sectors. The company focuses on increasing their export revenues with a view to reduce dependence on the Indian market. Their revenues from sale of products are geographically diversified with Europe, USA and other foreign countries accounting for 35.02 per cent, 30.62 per cent and 31 per cent of their revenue from sale of products in Fiscals 2021, 2020 and 2019, respectively.”

Talking about the possible risks of this IPO, Marwadi Financial Services said, “The business is dependent on the sale of products to certain key customers. The loss of any of these customers could have a material adverse effect on the business.”

“Pricing pressure from customers may adversely affect gross margin, profitability and ability to increase the prices, which may, in turn, have a material adverse effect on results of operations and financial condition,” added Marwadi Financial Services.

In terms of reservations, the QIBs had the largest reserved portion that stood at 50 per cent. The retail investors had a 35 per cent reservation. The NIIs had a 15 per cent reservation, which was the smallest of all the investor categories. Employees, on the other hand, got a Rs 36 discount per equity share. The basis of allotment for the issue is set to take place on September 21, almost a week after the issue closes. Following this, the refunds would be initiated to the investors who were not able to snag a share on September 22. Successful investors will see their shares credited to their Demat accounts on September 23. The listing date, though not confirmed, stands tentatively at September 24, 2021.

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