New Delhi, March 11 -- Sedemac Mechatronics Ltd, which counts private equity firm Xponentia Capital and venture capital firm A91 Partners among its investors, made a strong trading debut on Wednesday despite weakness in broader markets as the war in the Middle East soured investor sentiment.
Shares of Sedemac, a Pune-based maker of electronic component units, listed at Rs 1,510 apiece on the BSE. That's 11.7% higher than its initial public offering of Rs 1,352 apiece. The shares touched a high of 1,613.50 before ending the day at Rs 1,452.10, clocking a gain of 7.4% on its first day of trading, stock exchange data show.
The company now commands a market capitalization of Rs 6,412.7 crore (about $697 million).
Meanwhile, the BSE's benchmark Sensex slumped 1.72% Wednesday on fears that the ongoing war between the US-Israel and Iran as well as rising crude oil prices will hurt economic growth and corporate earnings.
The strong start comes after Sedemac's IPO was covered 2.68 times, thanks to institutional investors bidding for almost 8.5 times their quota. Retail investors' portion was subscribed only 20% while non-institutional investors, which include high-net-worth investors and corporate houses, bid for 77% of their portion.
The IPO was entirely an offer for sale of shares worth about Rs 1,087 crore (around $120 million). A91 Partners and Xponentia sold over a quarter of their stake. Infosys co-founder Nandan Nilekani's family office sold a little over half its stake. Funds associated with asset manager 360 One also participated in the issue.
The investors that didn't sell their shares in the IPO include Catamaran and Pratithi Investments, the family offices of other Infosys co-founders NR Narayana Murthy and Kris Gopalakrishnan, respectively.
A91, Xponentia, Nilekani's family office and the PE fund under 360 One made high returns by monetising part of their investment in the company, VCCircle previously reported.
Sedemac is a supplier of control-intensive, critical-to-the-application electronic control units (ECUs) to original equipment manufacturers (OEMs) in the mobility and industrial markets in India, the United States, and Europe. Critical-to-the-application components are those without which a piece of equipment cannot fulfil its primary function for the end user. For example, an ECU supporting electronic fuel injection in an engine-powered vehicle or a motor control unit in an electric vehicle is indispensable for mobility.
The company is currently on an annualised turn rate of around $113 million (about Rs 1,030 crore), having clocked revenue of Rs 770 crore in the first three quarters of the current fiscal year. It ended FY25 with a topline of Rs 658 crore. The company is poised for a net profit of around Rs 90-100 crore, which would mean that the IPO would be valuing it at 60x its projected profit for the year.
Published by HT Digital Content Services with permission from VC Circle.