The initial public offering (IPO) of Syrma SGS Technology has received a decent response from investors. Syrma SGS Technology IPO was subscribed 37 per cent on the first day of bidding. The public offer has so far received bids of 1.05 crore equity shares against the total issue size of 2.85 crore equity shares, data available with the National Stock Exchange (NSE) showed.
If you are planning to invest in Syrma SGS Tech IPO, here are the key things you must know
Syrma SGS Tech IPO Offer Details
Syrma SGS Tech IPO will be open for subscription till August 18. The price band has been fixed at Rs 209-220 per share. Syrma SGS Technology IPO comprises a fresh issue of shares worth Rs 766 crore and an offer for sale (OFS) of up to 33.69 lakh equity shares by promoter Veena Kumari Tandon.
At upper end of price band, the company aimed to raise Rs 840 crore.
Syrma SGS Tech IPO: How Company Plans to Use Funds
The net proceeds from the fresh issue will be used for funding capital expenditure requirements for the development of an R&D facility and expansion or setting up of manufacturing facilities, funding our working capital requirements and general corporate purposes, according to red herring prospectus (RHP).
Syrma SGS Technology IPO: Company Details
Syrma SGS Technology (Syrma) is one of the fastest growing electronics system design and manufacturing companies in the country. It is engaged in the turnkey electronics manufacturing services (EMS). The company has a large product portfolio, which includes printed circuit boards, RFIDS, electromagnetic, electromechanical parts and other products such as SSDs, USB flash drives, etc. Its products are primarily focused towards end-use industries such as automotive, healthcare, IT, industrial appliances and others. The company is also backed by a robust supplier network spread across 21 countries including the United States, Singappore and China.
Syrma SGS Technology IPO: Key Strength
India’s electronic manufacturing services (EMS) industry is likely to grow at a healthy CAGR of 30 per cent from Rs 2,654 billion in FY21 to Rs 9,963 billion by FY26. The strong growth is expected to be driven by robust demand for electronic products across all industries (automotive, consumer products, capital goods/ power) where Syrma SGS Technology is present, said ICICI Direct Research in a report.
Syrma SGS Tech’s wide product portfolio aids faster customer addition and wallet share gains from existing customers. It has also established relationship with diverse customer base across the world. Increased focus on R&D to optimise current product offerings and launch of new products can also be attrative for the investors. The increased R&D spends will help the company increase its ODM revenue share, ICICI Direct added.
Syrma SGS Technology IPO: Valuation
“In May 2022, Syrma Technology has done a pre-IPO placement of around 3 per cent equity at Rs 290 per shares. At higher price band, the IPO is valued at 24.1 per cent discount to the pre-IPO placement price, which may be considered favorable by the retail investors. But the company has demanded an EV/Sales multiple of 2.5x (to its FY22 proforma consolidated sales), which is at premium to the peer average. Thus the issue seems to be fully priced,” said Choice Broking.
Syrma SGS Technology IPO: GMP
Syrma SGS Technology shares are available at a premium (GMP) of Rs 30 in the grey market on Tuesday, according to market observers.
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