Bengaluru-based Maini Precision Products Limited (MPPL), an end-to-end solution provider engaged in process design, engineering, manufacturing, testing, and supply of a variety of precision products with close tolerances of upto 3 microns and assemblies, has received approval from the Securities and Exchange Board of India (SEBI) to raise Rs 900 crore through an initial public offering (IPO).
Maini Precision, which filed preliminary IPO papers with Sebi in December 2021, obtained its observations letter on March 22 2022, an update with the regulator showed on Tuesday.
In Sebi's parlance, its observation implies its go-ahead to float the initial share-sale.
As per market sources, the issue size will be approximately in the range of Rs 800-900 crore.
The initial public offering (IPO) with a face value of Rs 2 per equity share consists of a fresh issue of equity shares aggregating to Rs 150 crore, and an offer for sale of up to 2,54,81,705 equity shares, with promoters to offload 60,20,765 equity shares, individual shareholders up to 6,45,865 equity shares, up to 5,13,390 by other selling shareholders and 1,83,01,685 equity shares by investor shareholders.
Proceeds from the fresh issue will be used to repay/prepay - Rs 112.5 crs of its borrowings and will be used for general corporate purposes.
Promoted by Sandeep Kumar Maini, Gautam Maini and Chetan Kumar Maini, the company was incorporated in 1973. Maini is capable of diverse and critical manufacturing and finishing processes, including machined castings, die castings, machined forgings, bar route machining, plate machining, surface treatment, heat treatment, critical assembly, as well as ancillary activities such as end of line testing, export packing and warehousing, which encompasses end-to-end solutions for its customers both domestic and global.
MPPL has a diversified business, wherein the products are classified into two business, being aerospace, which it ventured into in 2004 and comprises precision products manufactured for aerospace and defense; and automotive and industrial, which comprises precision products manufactured for clean internal combustion engines, fuel injections and transmissions (internal combustion engines, fuel injections and transmissions collectively referred to as "Clean Powertrain"), hydraulics and industrial, agriculture and legacy automotive.
Being an export oriented business primarily exporting to United States of America, France, Sweden, Italy, Slovakia, England, Japan, Spain, Poland and Germany, its revenue from operations stood at Rs 560.30 crs for FY19, Rs 570 crs for FY20 and Rs 427.36 crs for FY21, 65.26%, 71.99%, 66.23% of its revenues being attributed to exports.
Automotive components are expected to remain the largest contributor of the precision parts market over FY21-25 at ~60% with the rest of the market catering to non-automotive sectors like aerospace, defence and allied, engineering and capital goods and power. Precision engineering is expected to log a 9-11% CAGR between fiscals 2021-2026, aided by growth in the domestic auto components and export demand and indigenous manufacturing for the defence segment.
ICICI Securities Limited, IIFL Securities Limited are the book running lead managers to the issue. |
