Syrma SGS Technology IPO: After 80 days of long halt in the primary market, Syrma SGS Technology IPO will hit the market on Friday, August 12. Engineering and design company Syrma SGS Tech will remain open for subscription till August 18. The IPO consists of a fresh issue of shares worth Rs 766 crore and an offer for sale of up to 3.37 million shares by promoter Veena Kumari Tandon. At the upper end of the price band, the firm will raise a total of Rs 840 crore. The company has fixed a price band at Rs 209-220 per share. Investors who wish to subscribe can bid for a lot size of 68 shares or in multiples thereafter.
Syrma SGS is a technology-focused engineering and design company engaged in turnkey electronics manufacturing services (EMS) that specialises in precision manufacturing. Its customers include TVS Motor Company, AO Smith India Water Products, Robert Bosch Engineering, and Business Solution, Eureka Forbes, and Total Power Europe BV. It operates through eleven manufacturing facilities in Himachal Pradesh, Haryana, Uttar Pradesh, Tamil Nadu, and Karnataka and has three R&D facilities which are located in Tamil Nadu, Haryana, and Germany.
The book-running lead managers for the issue are DAM Capital, ICICI Securities, and IIFL Securities. The equity shares are likely to be listed on both BSE and NSE.
Syrma SGS Technology IPO: GMP Today
A day before the subscription for Syrma SGS Technology IPO opens, in the grey market, shares were seen trading at 7 per cent or Rs 15 premium at Rs 235, against the IPO price at the upper band. However, stock market analysts warned IPO investors to make an investment decision only on the basis of GMP. They said that GMP is unofficial and non-regulated data. It has nothing to do with the company’s financials. They advised investors to look at the concrete fundamentals available on the balance sheet of the company.
Syrma SGS Technology IPO: Financials
Syrma reported a 16.6 percent on-year growth in proforma profit (which assumes the acquisition of SGS Tekniks and Perfect ID in April 2019) at Rs 76.46 crore for the year ended March 2022 on the strong top line and operating performance. Proforma revenue from operations grew by 43 percent to Rs 1,266.6 crore and EBITDA increased by 23 percent to Rs 143.70 crore compared to the year ending March 2021. EBITDA is earnings before interest, tax, depreciation, and amortisation.
Syrma SGS Technology IPO: Objective
Syrma will utilise its fresh issue money for funding the capital expenditure requirements for the development of its research & development facility. The funds will also get utilised for the expansion or setting up of manufacturing facilities, and working capital requirements besides general corporate purposes.
Syrma SGS Technology IPO: Should you Subscribe?
Ravi Singh, VP & head of research, Share India Securities, said: “The segment in which Syrma SGS is dealing i.e., electronics manufacturing services has a positive outlook ahead. The company is also focusing on products bearing high margins. SSTL’s manufacturing facilities in Tamil Nadu are located in a special economic zone which allows it to avail of certain tax and other benefits. The IPO is also well priced as per the valuations and investors may consider to subscribe this IPO with a medium to long-term perspective.”
Syrma SGS Technology will finalise the basis of the allotment of shares by August 23 and will initiate refunds to unsuccessful investors by August 24. Equity shares will get credited to the Demat accounts of eligible investors by August 25. The shares will start trading on the BSE and NSE will start with effect from August 26.