IPO
The public issue of electronics system design and manufacturing company Syrma SGS Technology continued to receive robust response from all kind of investors on August 18, the final day of bidding.
The offer has subscribed 32.61 times, receiving bids for 93.14 crore equity shares as against 2.85 crore shares on the offer, according to the data available on exchanges. It is to be noted that the offer size has been reduced to 2.85 crore from around 3.81 crore shares after the company mopped up funds worth Rs 252 crore through anchor book on August 11, a day before issue opening.
The portion reserved for qualified institutional investors was subscribed 87.56 times, while the quota set aside for non-institutional investors was subscribed 17.50 times.
Retail investors put in bids 5.53 times their reserved portion.
Syrma SGS Technology aims to raise little more than Rs 840 crore through the public issue, which opened for subscription on August 12.
The price band for the offer, which closes today, was fixed at Rs 209-220 a share, which is at a discount to the pre-IPO placement price of Rs 290 per share in May 2022.
“On FY22 financials, the IPO is valued at 43x EV/EBITDA, 4x EV/sales, and 68x PE, compared to industry leader, Dixon at CMP trades at 59x EV/EBITDA, 2.1x EV/sales and 117x PE. Owing to superior technology based manufacturing domain, healthy product mix, diversified product portfolio, strong R&D capabilities, and capacity addition, we recommend subscribe to the issue,” Reliance Securities said in a note.
Syrma is one of the fastest growing Indian electronics system design and manufacturing (ESDM) companies with a track record of technical innovation and marquee customers. It provides integrated services and solutions to original equipment manufacturers (OEMs), from the initial product concept stage to volume production through concept co-creation and product realization.
India’s EMS addressable market is likely to clock 30 percent CAGR during FY21-FY26 to reach $135 billion by FY26.
The market is expanding on the back of China+1 strategy, import substitution, make in India and government incentives i.e. production-linked incentive (PLI).
“Syrma is one of the leading designs and EMS companies in India likely to benefit in the coming years. We believe Syrma is well placed to capitalize on domestic and global opportunities,” Reliance Securities.
Syrma will utilise the fresh issue money for R&D facility and expansion of manufacturing facilities, and working capital requirements.
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