5 Things You Should Know Before Subscribing to Sansera Engineering IPO

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5 Things You Should Know Before Subscribing to Sansera Engineering IPO
Credit: © Reuters.

By Aditya Raghunath

Investing.com -- Sansera Engineering is an auto component company that has launched its IPO today. The price band for the IPO is Rs 734 – Rs 744, and it is looking to raise Rs 1,283 crore from the markets. Here are 5 things you should know about the IPO before subscribing to it:

  1. Reputation: The company is one of the leading suppliers of complex and high-precision components in the auto sector.
  2. Diversification: It has a diverse geographic spread with revenues coming in from India, the US and Europe. It also has a diversified customer base with revenues coming in from two-wheelers, passenger vehicles and commercial vehicles.
  3. Relationships: It has strong industry relationships. In the two-wheeler segment, it has over 25 years of business relationships with Bajaj, and over 20 years with Yamaha and Hero Motorcycle and Scooter each. In passenger vehicles, it has a over three-decade relationship with Maruti Suzuki (NS: MRTI ).
  4. Risks: The biggest risk for Sansera is the threat of electric vehicles. “Any failure to adapt to industry trends and evolving technologies to meet customers’ demands may materially adversely affect the company’s business and results of operations," said Kotak Securities in a note.
  5. Grey market premium: The GMP for Sansera has been hovering around Rs 83 which is just a little over 11%. If the GMP doesn’t increase beyond this, listing gains could be muted.

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