Apr 3, 2023
By: bhakti.makwana@timesinternet.in
Credit: Avalon Technologies
The electronic manufacturing services company Avalon Technologies is all set to open its initial public offering (IPO) today on April 3 and close on April 6. The price band for the issue has been set at ₹415-436 per share.
Credit: Avalon Technologies
The offer is a combination of fresh issue worth ₹320 crore and an offer for sale (OFS) of ₹545 crore.
Credit: BCCL
Avalon is an end-to-end electronic manufacturing service solutions provider founded in 1999. It has 12 manufacturing units located across the US and India.
Credit: Canva
The company says it can also benefit from ‘Make in India’ and the production-linked incentive (PLI) schemes that promote local manufacturing of components and electronic systems.
Credit: Wikipedia
“Considering the healthy business prospects for the Indian electronic manufacturing services (EMS) industry, company’s high return ratios and similar margins relative to peers and valuation comfort at 55.5x P/E on annualised FY23 financials, we recommend ‘subscribe’ to the issue,” said analysts at Reliance Securities.
Credit: Canva
“Its unique offering and B2B model help Avalon with long-term relationships with its diverse customers, ensuring incremental order book and steady margin. We recommend ‘subscribe’ for the long term,” said a report by Canara Bank Securities.
Credit: Canva
The company intends to utilise funds raised via the IPO towards debt repayment, funding working capital requirements and general corporate purposes. The company’s total net debt rose to ₹283 crore in FY22 from ₹261 crore in the previous financial year.
Credit: Investopedia
The company said it goes through competitive pressures in its business like rapid technological change, the development of new end products and their rapid obsolescence, evolving industry standards and significant price erosion over the life of a product – which would be detrimental to its future prospects.
Credit: Canva
The company’s net profit has nearly tripled to ₹68 crore in FY22 as compared to ₹23 crore in the previous financial year.
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The shares of the company are currently commanding a grey market premium (GMP) of ₹30 per share. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.
Credit: Canva
The company’s shares are scheduled to be allotted on April 12 and listed on the BSE and NSE on April 18.
Credit: Canva