IIT Bombay to reap Rs 55 crore windfall as Sedemac IPO to unlock nearly Rs 4,800 crore

IIT Bombay is set to score a major windfall from the initial public offering (IPO) of Deeptech auto electronics manufacturer Sedemac Mechatronics, a startup incubated at the institute nearly two decades ago. The Society for Innovation and Entrepreneurship (SINE), IIT Bombay’s startup incubator, holds about 408,000 shares in the Pune-based company. At the upper end of the IPO price band of Rs 1,352 per share, the stake is valued at roughly Rs 55 crore, turning what was effectively a near-zero cost incubation stake into a multi-crore gain. The IPO, which is entirely an offer for sale (OFS) of up to 8.04 million shares has a price band of Rs 1,287–Rs 1,352 per share, valuing the company at close to Rs 6,000 crore at the upper end. The IPO closes on March 6 and the shares are likely to be allotted on March 9. The company will be listed on March 11. The IPO was subscribed 78 percent, as of 1:15 pm on March 6. The powertrain controls and auto parts manufacturer received bids for 44.07 lakh shares, against the 56.32 lakh shares on offer, as per data available with the NSE till 12:20 pm. Existing shareholders set to gain Overall, the listing is set to unlock nearly Rs 4,800 crore for founders and investors. Among institutional investors, A91 Emerging Fund II LLP stands to gain the most. At the upper end of the price band, A91’s holding of about 8.03 million shares is worth roughly Rs 1,086 crore. The investor acquired the shares at an average price of Rs 368.28 each and had invested around Rs 300 crore in the company through a mix of primary and secondary transactions. At the IPO price, the value of A91’s stake has grown to over 3.6 times its investment. The fund is selling up to 2.41 million shares worth about Rs 326 crore in the OFS. These shares were acquired for roughly Rs 89 crore, implying gains of about Rs 237 crore, while it will continue to hold shares worth about Rs 760 crore after the listing. Xponentia Opportunities Fund II is also set to gain strong returns. The investor put in roughly Rs 122 crore in the company at an average acquisition price of Rs 352.29 per share. At the upper end of the IPO price band, its stake of about 3.48 million shares is valued at roughly Rs 470 crore, translating to returns of about 3.8 times. The fund plans to sell 1.04 million shares worth about Rs 141 crore in the IPO. Mace Private Limited invested about Rs 90 crore at a similar acquisition price. Its stake is now valued around Rs 345 crore, implying returns of nearly 3.8 times. Funds managed by 360 One are also poised for sizeable gains. The 360 One Special Opportunities Fund – Series 8 invested around Rs 88 crore in the company at an average cost of Rs 386.31 per share. At the upper end of the price band, its stake is valued at roughly Rs 307 crore, representing returns of about 3.5 times. Similarly, 360 One Monopolistic Market Intermediaries Fund invested about Rs 61 crore in the company at an average acquisition price of Rs 386.13 per share. At the IPO price band’s upper end, its stake is worth around Rs 213 crore, implying returns of roughly 3.5 times. HDFC Life Insurance Company Ltd, which invested about Rs 53 crore in Sedemac at an average acquisition price of Rs 373.68 per share, now holds a stake worth about Rs 192 crore, translating to returns of roughly 3.6 times. Family trusts, promoters set for healthy returns One of the highest multiples among investors is expected for Nandan Nilekani's NRJN Family Trust which invested about Rs 18 crore in the company at an average price of Rs 94.86 per share. At the upper end of the price band, its stake is valued at roughly Rs 261 crore, implying returns of more than 14 times. The company’s founding team is also set to see substantial wealth creation from the listing. Co-founder and IIT Bombay professor Shashikanth Suryanarayanan holds about 7.15 million shares, translating to a stake valued at roughly Rs 967 crore at the upper end of the price band. Fellow founders Amit Arun Dixit and Manish Sharma hold stakes worth around Rs 168 crore and Rs 117 crore, respectively, while promoter Anaykumar Avinash Joshi owns a stake worth about Rs 80 crore. Founded in 2007 by Professor Suryanarayanan along with his students, Sedemac develops electronic control systems used in automotive powertrain applications and supplies to global two-wheeler and automotive manufacturers.