Mamata Mach, Sanathan, Unimech at new lows; BSE IPO index down 5% in 1 week

Shares of Mamata Machinery, Sanathan Textiles, Unimech Aerospace & Manufacturing and Carraro India have tumbled up to 27% from their respective highs post market debut in December 2024.

Shares of Mamata Machinery, Sanathan Textiles, Unimech Aerospace & Manufacturing and Carraro India among the recently listed companies from the BSE IPO index hit new lows amid a sharp correction in equities. These stocks were down between 2 per cent and 6 per cent. They have declined up to 27 per cent from their respective highs post listing. These companies made their stock market debut in the month of December 2024.  In the past one week, the BSE IPO index slipped nearly 5 per cent as compared to BSE Sensex down 2.2 per cent during the period.  Among individual stocks, Mamata Machinery was locked in lower circuit of 5 per cent at Rs 476.45 on the BSE 01:42 pm; with no buyers seen at the counter. The stock has corrected 27 per cent from its record high of Rs 649 touched on December 30, 2024. The company's shares had made a stellar debut on D-Street on December 27, 2024 as they were listed at Rs 600, a 147 per cent premium over the issue price of Rs 243. Post listing, the stock zoomed 167 per cent against its issue price.

 

 

Mamata Machinery manufactures and exports machines for plastic bag making, packaging, and extrusion equipment. The company primarily sells its packaging machinery to direct consumer brands catering to the FMCG, Food, & Beverage Industry and bag and pouch making machines to convertors and service providers. Its machineries are also utilised in non-packaging applications, such as e-commerce bags and garment packaging bags.

 

The company has shown consistent performance over the years, with a growing number of machines sold both in India and internationally, leading to a steady improvement in margins. Looking ahead, Choice Equity Broking believes Mamata Machinery has strong long-term growth potential by expanding its presence in regions such as Europe, Africa, and the Middle East, which will further increase its customer base.

 

Shares of Unimech Aerospace hit a new low of Rs 1,270.30, down 6 per cent in intra-day trade. The stock of aerospace & defense company was down 17 per cent from its post listing high of Rs 1,523.60 hit on January 2, 2025. The stock had made a stellar debut on bourses on December 31, 2024, listed at Rs 1,491 per share, a 90 per cent premium against the issue price of Rs 785 on the BSE.

 

Unimech Aerospace is engaged in the manufacturing of complex tools like mechanical assemblies, electro-mechanical systems, and components for aero-engine and airframe production. The company is an engineering solutions provider specialising in machining, fabrication, assembly, testing, and creating new products based on the specific requirements of clients in the aerospace, defense, energy, and semiconductor industries.

 

Shares of Sanathan Textiles were down 4 per cent at Rs 348.05 in intra-day trade. The stock price of textile products company has declined 18 per cent from its post listing high of Rs 422.65 touched on debut day i.e. December 27. The company issued shares at Rs 321 in initial public offering (IPO).

 

Sanathan Textiles specializes in manufacturing polyester yarn and supplying cotton yarn globally. The company operates across three distinct business verticals: (a) Polyester yarn products, (b) Cotton yarn products, and (c) Yarns for technical textiles and industrial applications. These technical textiles cater to diverse sectors, including automotive, healthcare, construction, sports, outdoor activities, and protective clothing.

 

However, the company does not have long term agreements for supply of its raw materials. If it is unable to procure raw materials of the required quality and quantity, at competitive prices, its business, results of operations and financial condition may be adversely affected. Majority of its raw materials are sourced from few key suppliers. Discontinuation of operations of such suppliers may adversely affect the ability to source raw materials at a competitive price, HDFC Securities had said in its IPO note.

 

The company has a high working capital requirement and if it is unable to raise sufficient working capital the operations of its company will be adversely affected. It is in the advanced stages of commissioning a manufacturing facility in Wazirabad, Punjab through its Subsidiary, Sanathan Polycot Private Limited. Once this subsidiary is operational, then it will also have to arrange for further funding for additional working capital requirements, the HDFC Securities note stated.