Sansera Engineering files IPO-papers with SEBI; issue entirely an offer-for-sale

Sansera Engineering Ltd has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India to launch an IPO. The initial public offering is entirely an offer-for-sale of 1.72 crore equity shares by its existing shareholders and promoters. The OFS comprises up to 86.35 lakh shares sale by Client Ebene Ltd, up to 48.36 lakh shares by CVCIGP II Employees EBene, up to 20.58 lakh shares by S Sekhar Vasan, and up to 5.71 lakh shares each by Unni Rajagopal K, FR Singhvi and D Devaraj.

The book running lead managers to the issue are ICICI Securities, IIFL Securities and Nomura Financial Advisory. The registrar to the issue is Link Intime India Private Ltd. The listed industry peers of Sansera Engineering are Endurance Technologies, Minda Industries, Sundram Fasteners, Suprajit Engineering, Bharat Forge, Motherson Sumi Systems and Mahindra CIE Automotive. The weighted average return on net worth for fiscals 2019, 2020 and 2021 is 11.98 per cent. The average price-to-earning (P/E) ratio is 60x.

The company will not directly receive any proceeds from the offer and all the offer proceeds will be received by the Selling Shareholders. This is the company’s second attempt to go public. In August 2018, Sansera Engineering had filed IPO papers with capital markets regulator and had also received its clearance to float the public issue. However, it did not go ahead with the launch. 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.

Sansera Engineering’s business model is well diversified by customer base, end segment, geographical spread of revenues and product portfolio. It derives its revenue from multiple segments within the automotive sector, including the two-wheeler, passenger vehicle and commercial vehicle verticals. Within the non-automotive sector, it manufactures and supplies a wide range of precision components for the aerospace, off-road, agriculture and other segments, including engineering and capital goods.