Sansera Engineering IPO - Everything you need to know!
A Thread 🧵👇
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#IPOwithJST
A Thread 🧵👇
Do hit the retweet and help us educate more investors :)
#IPOwithJST
1/n
About the Company -
- Manufactures complex and critical precision engineered components
2 Segments -
- Automotive - 2W, PV, and CVs (88.5% of total revenue)
- Non-Automotive - aerospace, off-road, agriculture, engineering, and capital goods (11.5% of total revenue)
About the Company -
- Manufactures complex and critical precision engineered components
2 Segments -
- Automotive - 2W, PV, and CVs (88.5% of total revenue)
- Non-Automotive - aerospace, off-road, agriculture, engineering, and capital goods (11.5% of total revenue)
2/n
Products -
Automotive - Connecting rods, rocker arm, crankshaft, gear shifter fork, etc that are critical for engine, transmission, suspension etc
Non-Automotive - range of precision components, supplying directly to OEMs in finished (forged and machined) condition
Products -
Automotive - Connecting rods, rocker arm, crankshaft, gear shifter fork, etc that are critical for engine, transmission, suspension etc
Non-Automotive - range of precision components, supplying directly to OEMs in finished (forged and machined) condition
3/n
Note - 83% of revenue (Top 4 products in the table) comes from components are used in an Internal combustion engine (ICE)
EV is a headwind for them (Mgmt said they will shift focus to EVs on a BQ interview. So this is a key monitorable)
Image 2 shows a connecting rod
Note - 83% of revenue (Top 4 products in the table) comes from components are used in an Internal combustion engine (ICE)
EV is a headwind for them (Mgmt said they will shift focus to EVs on a BQ interview. So this is a key monitorable)
Image 2 shows a connecting rod
4/n
Geographic Revenue break up - (Img 1)
65% from India, 35% from abroad (Europe, US, etc)
Manufacturing - (Img 2)
15 plants in India and 1 in Sweden
Capacity Utilization - (Img 3)
Geographic Revenue break up - (Img 1)
65% from India, 35% from abroad (Europe, US, etc)
Manufacturing - (Img 2)
15 plants in India and 1 in Sweden
Capacity Utilization - (Img 3)
5/n
About the Issue -
Dates – 14 to 16 September
Price – Rs 734 to Rs 744
Issue Size – Rs 1283 Cr
Pure OFS, no fresh money being raised
MCap post listing – Rs 3773 Cr (34% of the company being sold)
About the Issue -
Dates – 14 to 16 September
Price – Rs 734 to Rs 744
Issue Size – Rs 1283 Cr
Pure OFS, no fresh money being raised
MCap post listing – Rs 3773 Cr (34% of the company being sold)
6/n
Quick Facts on Sansera (Img 1)
New products (Img 2) -
Some of their new products included components for both ICE and E-2Ws.
They sold components across 69 product families in FY21 v/s 51 in FY19.
Quick Facts on Sansera (Img 1)
New products (Img 2) -
Some of their new products included components for both ICE and E-2Ws.
They sold components across 69 product families in FY21 v/s 51 in FY19.
7/n
Customers -
In India – 9 of the top 10 2W OEMs + the leading PV OEM
Globally – 6 of the top 10 Light Vehicle OEMs + 3 of the top 10 global MHCV OEMs
Suppliers to 71 customers in FY21 v/s 64 in FY19
Bajaj is the biggest customer | Long-standing relationships (Img 2 & 3)
Customers -
In India – 9 of the top 10 2W OEMs + the leading PV OEM
Globally – 6 of the top 10 Light Vehicle OEMs + 3 of the top 10 global MHCV OEMs
Suppliers to 71 customers in FY21 v/s 64 in FY19
Bajaj is the biggest customer | Long-standing relationships (Img 2 & 3)
8/n
Financials (Img 1)
Valuation -
Price to sales =2.4x
PE = 36.2x
Financials (Img 1)
Valuation -
Price to sales =2.4x
PE = 36.2x
9/n
Conclusion -
The company derives major revenue from components related to the Internal combustion engine of a car.
As more and more EVs start to come, engines will be replaced by an electric motor and components will change drastically.
Conclusion -
The company derives major revenue from components related to the Internal combustion engine of a car.
As more and more EVs start to come, engines will be replaced by an electric motor and components will change drastically.
10/n
This is a classic example of a company that will undergo major disruption - Let's see how they adapt to the change!
Valuations seem priced in with 2.4x P/S as many ancillaries are available at 1x price to sales or below it even!
Thanks for reading! Happy weekend :)
This is a classic example of a company that will undergo major disruption - Let's see how they adapt to the change!
Valuations seem priced in with 2.4x P/S as many ancillaries are available at 1x price to sales or below it even!
Thanks for reading! Happy weekend :)
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