Unimech Aerospace And Manufacturing Limited - IPO

1. We are a global high precision and engineering solutions company with capabilities to manufacture under two models: (i) build to print and (ii) build to specifications, for our customers.

2. We have established ourselves as an approved supplier for various industry leaders in aerospace, defence, semi-conductor and energy sectors.

3. We have developed and have a potential to further evolve our facilities to cater to all the specific and changing needs and requirements of the customers with respect to the products we make and for the industry we supply products to, allowing us to provide customized and tailored solutions.

4. We are a leading exporter of aerospace components, with exports significantly contributing to our overall revenue.

5. We have a global delivery service model for supplying products to our customers, which includes logistical support and direct export to various companies including USA and Europe.

6. We are a key link in the global supply chain for global aerospace, defence, semi-conductor and energy OEMs and their licensees for the supply of critical parts like aero tooling, ground support equipment, electro-mechanical subassemblies and other precision engineered components.

7. We have established a sub-contractor ecosystem with vendors who undertake aspects of our manufacturing process with limited complexity, enabling us to concentrate on critical aspects of the manufacturing process.

8. We are led by a qualified and experienced management team who are supported by a motivated and hard-working team of engineers and other members.

1. A significant portion of our total revenue from operations i.e. 98.25%, 99.35%, 94.70% and 95.84% in the six months period ended September 30, 2024, Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively is attributable to the aerospace sector wherein we manufacture products pertaining to aero engine tooling and airframe tooling. Any adverse changes in the aerospace sector could adversely impact our business, results of operations and financial condition.

2. We are dependent on our top five customers who contribute to 94.62%, 96.80%, 93.88% and 88.97% of our total revenue from operations in the six months period ended September 30, 2024, Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively and the loss of any of these customers or a significant reduction in purchases by any of them could adversely affect our business, results of operations and financial condition.

3. Our business works on a longer gestation period wherein, there is considerable time gap of 7 to 28 weeks between the receipt of order and the payment, thereby, affecting our working capital requirements.

4. Our business is dependent on exports and the performance of geographies where we supply our products. 95.67%, 97.64%, 95.20% and 91.06% of our total revenue from operations in the six months period ended September 30, 2024, Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively came from exports. Any adverse changes in the conditions affecting the industries in global markets in which our products are supplied, including our key markets such as United States and Germany, can adversely impact our business, cash flows, results of operations and financial condition.

5. A significant part of our operations i.e. 83.46%, 89.35%, 73.50% and 68.06% in the six months period ended September 30, 2024, Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively were conducted through our Material Subsidiary, Innomech Aerospace Toolings Private Limited ("Innomech"), and we are dependent on the operating income and cash flows generated by Innomech. Any loss or reduction in the business attributable to our subsidiary, or a change in our shareholding in Innomech, could have a material adverse effect on our business, prospects, results of operations, cash flows and financial condition on a consolidated basis.

6. We have experienced negative cash flows from investing and financing activities in previous periods and cannot assure you that we will not experience negative cash flows in future periods. Negative cash flows may adversely affect our financial condition, results of operations and prospects.

7. Certain land on which our manufacturing facilities are located are leased to us by Karnataka Industrial Areas Development Board. If we are unable to comply with conditions of use of such land or relocate our operations on commercially reasonable terms, there may be an adverse effect on our business, financial condition and operations.

8. The Offer Price, market capitalization to total income multiple and price to earnings ratio based on the Offer Price of our Company, may not be indicative of the market price of the Equity Shares on listing.

9. While we have achieved substantial revenue growth and expanded manufacturing capacity in recent years, it's important to note that our historical growth rate is partially attributed to a relatively small revenue base. There is no assurance that we can sustain this high growth rate in the future. Market conditions, competitive pressures, and economic factors could impact our ability to achieve similar growth levels going forward. We have experienced growth in recent years and may be unable to sustain our growth or manage it effectively.

10. Our business and profitability is substantially dependent on the availability and cost of our raw materials, and any disruption to the timely and adequate supply of raw materials, or volatility in the prices of raw materials may adversely impact our business, results of operations and financial condition. We depend on these third-party suppliers of raw materials and do not have firm commitments for supply or exclusive arrangements with any of our suppliers and are required to pay advances from time to time. The absence of long-term contracts or exclusive arrangements and nonrecovery of advances, exposes us to potential supply chain disruptions which could significantly impact our production capacity, leading to delays in order fulfilment and potential loss of revenue.