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 — has filed preliminary papers with capital market regulator SEBI to raise funds through an initial share sale. The company is looking to raise anywhere between ₹800-900 crore via an initial public offering.

The initial public offering (IPO) with a face value of ₹2 per equity share consists of a fresh issue of equity shares aggregating to ₹150 crore, and an offer for sale of up to 2,54,81,705 equity shares, according to the draft red herring prospectus (DRHP).

As a part of the OFS, promoters will offload 60,20,765 equity shares, individual shareholders will sell up to 6,45,865 equity shares, other selling shareholders will sell up to 5,13,390 shares, and investor shareholders will sell 1,83,01,685 equity shares.

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Proceeds from the issue will be used to repay/prepay ₹112.5 crore borrowings and the rest for general corporate purposes.

Promoters of Maini Precision Products include Sandeep Kumar Maini, Gautam Maini and Chetan Kumar Maini. It was incorporated in 1973.

Diversified business

Maini Precision Products offers diverse, critical manufacturing and finishing processes including machined castings, die castings, machined forgings, bar route machining, plate machining, surface treatment, heat treatment and critical assembly, as well as ancillary activities such as end of line testing, export packing and warehousing — end-to-end solutions for Maini Precision Products’s customers, both domestic and global.

Maini Precision Products has a diversified business wherein the products are classified into two — 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.

New generation products

Maini Precision Products new-generation products include hybrid electric shaft motors, low-pressure turbine nozzle guide vanes for the LEAP Engine, landing and braking system parts for aircraft, and BLDC motors, e-axles and transmission systems for electric two-/three- wheelers and LCVs

Customers in the aerospace business include companies such as Safran Aircraft Engines, Marshall Aerospace and Defense Group, Eaton Aero, ITP Externals SLU, Parker Aerospace and Woodward, and in the automotive and industrial business include Bosch, Eaton Vehicle Group, Danfoss, Marelli Powertrain India, Volvo Group India, Cummins India and BorgWarner Cooling Systems India.

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Maini Precision Products mainly exports to the US, France, Sweden, Italy, Slovakia, England, Japan, Spain, Poland and Germany. Its revenue from operations stood at ₹560.30 crore for FY19, ₹570 crore for FY20 and ₹427.36 crore for FY21, with 65.26 per cent, 71.99 per cent, 66.23 per cent of its revenues being attributed to exports, respectively.

Automotive components are expected to remain the largest contributor of the precision parts market over FY21-25 at ~60 per cent 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 per cent CAGR between FY21-25, aided by growth in domestic auto components, export demand and indigenous manufacturing for the defence segment

ICICI Securities and IIFL Securities are the book running lead managers to the Maini Precision Products issue.

Published on December 15, 2021