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Mumbai based Aeroflex Industries Limited (‘Aeroflex” or “the Company”) is a manufacturer of environment friendly Metallic Flexible Flow Solution products, catering to global markets. Aeroflex exports its products to more than 80 countries including Europe, USA and others, generating more than 80% of its revenue from exports has received final observation from the capital markets regulator, Securities and Exchange Board of India (SEBI), to raise funds through an initial public offering (IPO).

The company had filed preliminary IPO papers with Sebi on March 31, 2023.

Aeroflex’s solutions find application in a wide spectrum of industries for controlled flow of all forms of substances including air, liquid and solid. The Company’s manufacturing facility and NABL accredited R&D lab are situated at Taloja, Navi Mumbai. The Company has filed its Draft Red Herring Prospectus (DRHP) with SEBI to raise about Rs. 350 crores through an Initial Public Offering (IPO).

Aeroflex is subsidiary of Sat Industries Limited which is also listed on BSE and NSE. Both Aeroflex and Sat Industries Limited have dividend payment history. Sat Industries Limited has track record of scaling up of multiple diverse businesses backed by acquisition led strategy.

The Offer with a face value of Rs 2 per equity share consists of a fresh issue of equity shares worth up to Rs. 160 crores and an offer-for-sale (OFS) of up to 17.5 million equity shares by promoters selling shareholders and promoter group. The Company in consultation with the BRLM may give a discount to the eligible shareholders of its Promoter i.e. Sat Industries Limited.

As per the DRHP, the proceeds from the fresh issue will be utilised to the extent of Rs. 35 crores for the prepayment of outstanding secured borrowings availed by the Company, Rs. 84 crores for funding its working capital requirements, and certain of the amount will be used general corporate purposes and acquisitions for inorganic growth.

For Fiscal 2022, Aeroflex generated consolidated revenue from operations of Rs. 240.8 crores. The Company had EBITDA of Rs. 46.7 crores and EBITDA margin of 19.4%. The Company’s profit after tax for Fiscal 2022 was Rs. 27.5 crores with PAT margin of 11.4%. The Company’s Return on Equity (RoE) and Return on Capital Employed (RoCE) was 31.9% and 36.3% for Fiscal 2022. The Company has low leverage with debt-to-equity ratio of 0.45 as of January 31, 2023.

Flexible flow solutions play a critical role in transfer of substances (air, liquid and solid) in any industrial or commercial ecosystem, connecting the origin and end points of various processes. The Company offers its products under more than 1,700 SKUs (Stock Keeping Units). The Company has recently developed products made of bronze as well and has a pipeline of more than 55 products as on date. Given the complexity of the research and product development, varying product applications, necessary technical expertise, precision involved, lengthy and stringent customer qualification processes, Aeroflex’s business model poses significant entry barriers (to new entrants) as well as exit barriers (to existing customers).

Pantomath Capital Advisors Private Limited is the sole book-running lead manager. Company’s equity shares are proposed to be listed on the BSE and NSE.

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