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Sansera Engineering stock lists at 9% premium to IPO price; shares price crosses Rs 800 on D-St debut

Sansera Engineering IPO was entirely an offer for sale (OFS) of 1.72 crore equity shares by the selling shareholders

Sansera Engineering shares made a strong debut on stock exchanges on Friday, 24 September. The stock was listed at Rs 811.35 apiece, rallying over 9 per cent from the IPO price of Rs 744 per share. At the time of listing, the market capitalisation of Sansera Engineering stood at Rs 4,168.54 crore. Upon successful listing, the company joined other listed peers such as Endurance Technologies, Minda Industries, Sundram Fasteners, Suprajit Engineering, Bharat Forge, Motherson Sumi Systems, and Mahindra CIE Automotive on the stock exchanges. The 1,283 crore IPO was subscribed 11.47 times, which was opened during September 14-16. Sansera Engineering IPO was entirely an offer for sale (OFS) of 1.72 crore equity shares by the selling shareholders.

Sansera Engineering Ltd had mopped up Rs 382 crore from anchor investors, ahead of IPO. This was the company’s second attempt to go public. Earlier, Sansera Engineering had filed IPO papers with Sebi in August 2018 and had also received its clearance to float the public issue. However, it did not go ahead with the launch. The Bengaluru-based firm is an engineering-led integrated manufacturer of complex and critical precision engineered components across automotive and non-automotive sectors.

In India, Bajaj Motors, FIE group and Sansera, are among the leading two-wheeler rocker arm manufacturers in India. Micro Turner, Sansera and Schaeffler India are the leading passenger vehicle rocker arm manufacturers in India. Sansera is the largest supplier of rocker arms to two-wheeler as well as passenger vehicle OEMs in India.

Analysts said that Sansera Engineering clocked EBITDA margins of 17.6% in FY21 with a return ratio of 10-12%. On the b/s front, as of FY21, debt to equity is at 0.6x. In terms of valuation, it is priced at ~35x P/E on FY21 EPS (| 21/share) at the upper end of price band i.e., Rs 744,” analysts at ICICI direct Research said. According to the brokerage firm, the key risks include failure to adapt to industry trends and evolving technologies, dependence on certain key customers, and pricing pressure from customers.

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