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Avalon Technologies IPO closed; 2.21 times subscribed, 84% retail.
Avalon Technologies IPO: The EMS industry as a whole is expected to grow at a compound annual growth rate (CAGR) of 32%, from Rs 1.47 lakh crore in FY22 to Rs 4.5 lakh crore in FY26.
Even though the stock market had gotten better, investors were not very interested in Avalon Technologies’ first public offering. On April 6, the last day of bidding, 2.21 times as many people signed up for the IPO as the size of the offer, which was 1.14 million shares.
Also, Read – SEBI approves Zaggle Prepaid, Cyient DLM, Healthvista India, Rashi Peripherals IPOs.
Retail investors, who were given 10 percent of the shares in the IPO, bought 84 percent of the shares they were given, while high-net-worth investors bought 41 percent of the shares they were given.
Qualified institutional buyers (QIBs) put in bids that were 3.57 times larger than the amount set aside for them, which was 75% of the offer.
The electronic manufacturing services company, which provides end-to-end operations for delivering box-build solutions in India, wants to raise Rs 865 crore through a public issue that includes a fresh issuance of shares worth Rs 320 crore and an offer for sale of Rs 545 crore by selling shareholders, including promoters.
Avalon has already raised Rs 389.25 crore through an anchor book at Rs 436 per share on March 31.
The price range for the offer, which started on April 3 and ends today, was set at Rs 415–436 per share.
Most brokerage houses suggested that Avalon issue with a long-term view, since the EMS industry is expected to grow quickly and the Make in India and PLI schemes are likely to help it.
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Avalon is an integrated EMS provider whose clients come from a wide range of end-user industries and have factories in strategic places. Its scope of work requires complex designing, engineering, buying parts, and making them, which creates long lead times and, as a result, barriers to entry.
“It is likely to benefit from the government’s “Make in India” and “PLI” programs, which encourage local production of parts and electronics systems. The company wants to get rid of more debt, which should help it make more money and improve its return ratios “Reliance Securities said.
The brokerage house said that the issue should be bought because the Indian EMS industry has good business prospects, the company has high return ratios and similar margins to its peers, and its valuation is reasonable at 55.5x P/E on annualized FY23 financials.
The United States is where most of the company’s income comes from (63 percent), and it serves new industries like clean tech, power automation, and mobility. As of November 2022, the company had 80 customers and a backlog of orders worth Rs 1,190 crore.
Overall, the EMS industry is expected to grow at a compound annual growth rate (CAGR) of 32%, going from Rs 1.47 lakh crore in FY22 to Rs 4.5 lakh crore in FY26.
“It looks like its debt-to-equity ratio is higher than the average for its industry. But Avalon’s unique product and business-to-business (B2B) model help it build long-term relationships with its many different customers, which helps it keep a steady order book and steady margin. We suggest signing up for a long-term plan,” Securities of Canara Bank.
Avalon’s financial performance is strong and stable, and its margins are getting better. However, its PAT margin for the first eight months of FY23 went down, and it has a high debt ratio right now. Second, it has a small number of clients and only serves a certain segment, which means that a change in customer preferences could hurt it, according to Swastika Investmart, which also said that high-risk investors should buy this issue for the long term.
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Will investors be happy with Avalon Technologies on April 18, when it goes on the stock market?
Analysts who didn’t want to be named said that Avalon Technologies IPO shares are now trading flat to down on the “gray market.” Sharp profit-taking on the stock market after a nine-day run could also hurt the performance of the listing.
Avalon Technologies’ debut on the bourses on April 18 is not likely to make investors happy. Experts say this is because investors other than QIBs have been lukewarm, valuations are high in a highly competitive industry, and investors are afraid of further margin erosion.
Avalon’s initial public offering (IPO) got a good response on the last day of subscriptions, but only from qualified institutional investors. The response was quiet from everyone else.
During April 3–6, 2.21 times as many people signed up for the offer as there were spots available. The portion set aside for qualified institutional investors was taken up 3.57 times, while high net worth individuals and retail investors bought 41% and 84% of the available shares, respectively.
Also, Read – Sebi gives EbixCash permission to go public.
Astha Jain, a Senior Research Analyst at Hem Securities, said, “We expect the company to list at par on the day it goes public.”
“The company has a global delivery footprint with high quality standards and advanced manufacturing and assembly capabilities. Its business is well-diversified, which gives it strong growth opportunities, and it has strong relationships with well-known customers. But if you compare the size of the B2C market to the size of the B2B market, which is what the company does, the valuation seems a little bit high “Astha thought.
Manish Chowdhury, the head of research at Stoxbox, also said that the grey market shows that the premiums have gone down over time and that the issue is likely to open at the same price on the day it is listed.
He thinks that the lack of interest from investors other than those in the QIB category will hurt how well Avalon Technologies does after it goes public.
He also thinks the issue was worth a lot, especially since the company’s revenue growth was slower than the industry average and the competition in the electronic manufacturing services industry was getting tougher.
Analysts who didn’t want to be named said that Avalon IPO shares are now trading flat to down on the “gray market.” The grey market is an unofficial place where IPO shares are traded. Investors usually look at the grey market to get an idea of what the share price will be when it goes public.
Sharp profit-taking on the stock market after a nine-day run could also hurt the performance of the listing. At the time this article was written, the BSE Sensex had dropped more than 600 points after going up more than 2,800 points in nine straight sessions.
“The EMS industry, which the company is in, has long-term potential, but the market doesn’t seem ready to give it a P/E multiple of 40x in a highly competitive and fragmented market where margins could get smaller,” Manish said.
With India still lagging behind its global peers in terms of per capita consumption of electronics and the contribution of electronics manufacturing to GDP set to rise (from 2.7% in CY21 to 4.7% in CY26), he said investors should look for opportunities in this space at reasonable prices.
Avalon’s consolidated profit for the eight-month period that ended in November FY23 dropped by 19.2% from the same time last year to Rs 34.2 crore. This was because the same time last year had a lot of extra money coming in. In the same time frame, the profit margin went from 7.81 percent to 5.84 percent.
During the same time period, consolidated revenue went up by 8% YoY to Rs 585 crore, with the most growth coming from the clean energy, mobility and transportation, and industrials segments. At the operating level, EBITDA (earnings before interest, taxes, depreciation, and amortization) grew by 16.8% YoY to Rs. 68 crore, and the margin grew by 87 basis points.
Compared to the previous year, Avalon’s PAT grew by 195 percent to Rs 68.2 crore and its revenue grew by 22 percent to Rs 841 crore in FY22. During the same time period, the net profit margin went up 476 bps to 8.1 percent, while EBITDA went up 47.5 percent to Rs 97.5 crore and the margin went up 202 bps to 11.6 percent.
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“Even though Avalon Technologies has a good overall outlook, investors should be careful given how the market is doing right now. The electronics manufacturing industry is known for being unstable, and rising raw material costs could hurt the business “The founder of Unlistedkart, Krishna Raghavan, said.
Last week, Avalon Technologies raised Rs 865 crore through a public offering. Of this amount, Rs 320 crore will be used to pay off debts and meet working capital needs.
Customers like Kyosan India, Zonar Systems Inc, Collins Aerospace, e-Infochips, The US Malabar Company, Meggitt (Securaplane Technologies Inc), and Systech Corporation are among the companies that have worked with the company.
It has 12 manufacturing units in the US and India. These units offer a wide range of services, from cable assembly and wire harnesses to sheet metal fabrication, machining, magnetics, and injection-molded plastics.
Sebi gives EbixCash permission to go public. In a statement, the company said that it now plans to work with its advisors on the next steps that will lead to the listing of EbixCash on NSE and BSE.
The Securities and Exchange Board of India (SEBI) recently gave EbixCash, the fintech arm of Ebix Inc, the green light for its planned initial public offering (IPO).
In a statement from April 10, the company said that it now plans to work with its advisors on the next steps that will lead to the listing of EbixCash on NSE and BSE.
Also, Read – Updater Services sends SEBI draft papers to raise money through an IPO.
Reports say that the public offering is expected to bring in between Rs 6,000 crore and Rs 8,000 crore. This would make it one of the largest IPOs in India’s financial services sector.
EbixCash offers foreign exchange services in about 20 international airports, including Delhi, Mumbai, Mumbai, Hyderabad, Chennai, Kolkata, and Mumbai.
By gross transaction value, EbixCash is the leader in the business of sending money abroad. With more than 517,000 travel agents and about 17,900 registered corporate clients, it is one of the largest travel exchanges based in India and serving Southeast Asian markets.
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The financial technologies business of EbixCash offers clients software solutions for managing wealth, assets, and loans, as well as for insurance and bus information systems. Business process outsourcing services from EbixCash help a wide range of industries with IT and call center services.
EbixCash said on February 14 of this year that it would allow Unified Payments Interface (UPI) transactions for foreigners visiting India during the G-20 summit. This was after Reserve Bank of India (RBI) Governor Shaktikanta Das said that UPI would be allowed for travelers coming into India at certain international airports.
Updater Services sends SEBI draft papers to raise money through an IPO. The initial public offering (IPO) will include a new issue of Rs. 400 crore and an offer by its current shareholders and promoters to sell up to 13.30 million shares.
Updater Services Ltd has given the Securities Exchange Board of India a preliminary red herring prospectus in order to raise money through an initial public offering.
The initial public offering (IPO) will include a new issue of Rs 400 crore and an offer by its current shareholders and promoters to sell up to 13.30 million shares.
Also, Read – Virat Kohli-backed Go Digit General Insurance resubmits draft documents to SEBI.
Tangi Facility Solutions Pvt. Ltd. will sell up to 6.65 million shares, India Business Excellence Fund-II will sell up to 1.33 million shares, and India Business Excellence Fund-IIA will sell up to 5.32 million shares.
The Rs. 133 crore that was raised from the new issue will be used to pay off debt. Updater Services Ltd had borrowed a total of Rs 194.17 crore as of December 2022.
Also, Rs 115 crore will be used to cover the company’s working capital needs. As of December 2022, the company had a total outstanding debt of Rs 134.48 crore for its working capital facilities.
Lastly, the company plans to use Rs 80 crore from the new issue to pursue outside projects with the goal of growing its operations.
The issue’s lead managers are IIFL Securities, Motilal Oswal Investment Advisors, and SBI Capital Markets.
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Updater Services Ltd is a leading and integrated business services platform based in India. It offers its clients all over the country Integrated Facilities Management (IFM) services and Business Support Services (BSS).
The company has a wide range of services that make it stand out in the IFM market in India, where it is the second largest player. It also offers Audit and Assurance services through its subsidiary, Matrix. Matrix is a leading provider of dealer/distributor audits and retail audits, and its many branches and field associates have put it at the top of the Indian market. Also, through Matrix, Updater Services Ltd. offers services to check the background of employees.
Through its subsidiaries, Denave and Athena, the company also offers services to help sales. Through its subsidiary, Avon, it is also the market leader in India for managing mailrooms.
For FY22, the company made Rs 1483.55 crore, which is more than the Rs 1210.03 crore it made the year before. Last year, the net profit for the same time period was Rs 47.56 crore. This year, it was Rs 57.37 crore. The EBITDA margin stayed the same at 5.8%, the same as it was last year at 5.78%.
Virat Kohli-backed Go Digit General Insurance resubmits draft documents to SEBI. In February, the Securities Exchange Board of India sent back a draft of its employee stock option plan. The company says it made changes to ESOP that have been approved by both the board and the shareholders.
Go Digit General Insurance Ltd, which is backed by Canada’s Fairfax and cricketer Virat Kohli, has re-filed its draft papers with the Securities Exchange Board of India (SEBI) in order to raise money through an initial public offering (IPO).
In February, the draft papers were sent back to the market regulator. The Draft Red Herring Prospectus (DRHP) was sent back in accordance with SEBI’s Issuance of Capital and Disclosure Requirements rules. These rules allow rights granted under the employee stock option plan (ESOP) to be in effect at the time the draft prospectus was filed, but they do not allow employee stock appreciation rights.
Also, Read – RK Swamy IPO creates listing pitch, hires i-bankers.
The company said that it made changes to ESOP, which the board and shareholders had already agreed to earlier in the month.
The IPO includes a new issue of Rs 1,250 crore and an offer by shareholders and promoters to sell up to 109.45 million shares. By Go Digit Infowarks Services Pvt Ltd., the OFS is made up of up to 109.43 million shares. Kohli’s wife, the actor Anushka Sharma, is also an investor in the company.
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The money from the new issue will be used to add to the company’s capital base, keep it solvent, and pay for other general business needs.
Go Digit sells insurance for cars, health, travel, property, boats, and liability, among other things.
It is one of the first non-life insurers in India to run completely on the cloud, and it has developed application programming interface integrations with several channel partners.
RK Swamy IPO creates listing pitch, hires i-bankers. After 37 years of working together, RK Swamy and BBDO, a leading network of the global Omnicon group, said they were breaking up in July 2022. Under a new agreement, RK Swamy bought out BBDO’s share of the joint venture, and BBDO bought out RK Swamy’s share of BBDO India.
“Advertising can bring back more than what was put into it. Every time, try to give this to clients.”
So said RK Swamy, the founder of the first advertising agency that bears his name. Now, 50 years after the company first opened for business in Chennai, it wants to make money by selling shares.
Multiple people who know about the situation told Moneycontrol that RK Swamy Advertising Associates has started the process to unlock value and launch an initial public offering (IPO). This sets the stage for one of the most unusual stock market debuts of the year.
If the company’s plans to go public come to fruition, it will be the first time that a major integrated marketing services group has ever done an IPO in India.
The company, which used to be called RK Swamy BBDO and is now called RK Swamy Hansa Group, has four main areas of service: advertising, interactive and media, market research, brand activation, and data analytics.
“The deal is on and has been going on for a while. Investment banks IIFL Capital, Motilal Oswal Investment Advisors, and SBI Capital have been asked by RK Swamy Hansa Group to help with this “one of the people listed above said.
A second person confirmed the above group of bankers and said that as of now, the company’s plan was to raise around Rs 500 crore through the IPO, which would be a mix of primary (Rs 150–200 crore) and secondary (Rs 300 crore) share issues.
He also said that no final decision had been made about the size of the IPO, which could change in the future depending on how the market is doing.
A third person said that the proposed listing would make it easier for a group of NRI investors who own about 16% of the company to get their money out.
“The IPO would also help raise growth capital for expansion, especially in overseas markets,” this person said.
“This kind of business doesn’t have a listing anywhere. It has nothing to do with advertising. If everything goes as planned, this deal will make it easier for other people to start thinking along the same lines. It’s likely to open doors for other companies in the same field that are big enough and want to raise money “A fourth person said.
Also, Read – Avalon Technologies IPO closed; 2.21 times subscribed, 84% retail.
Affle India, a company that does mobile advertising, and Latent View, a company that does digital analytics, are both listed players in similar segments.
All four of the people above talked to Moneycontrol on the condition that they would not be named.
When RK Swamy Hansa Group was asked a detailed question by email, Group CFO Rajeev Newar replied, “No comment.” Moneycontrol tried to get a comment from IIFL Capital, Motilal Oswal Investment Advisors, and SBI Capital, but they did not respond right away.
In an earlier job, according to his LinkedIn profile, Newar led the change of Chalet Hotels from a private company to a public company after an IPO of Rs 1641 crores.
THE PLAN OF THE RK SWAMY HANSA GROUP
After 37 years of working together, RK Swamy and BBDO, a leading network of the global Omnicon group, said they were breaking up in July 2022.
Under a new agreement, RK Swamy bought out BBDO’s share of the joint venture, and BBDO bought out RK Swamy’s share of BBDO India.
Srinivasan Swamy, chairman and managing director of RK Swamy Hansa Group, said in an interview with Storyboard18 on July 12, 2022, “We decided to go our separate ways because we wanted to combine our services into one.” Shekar Swamy is the Group CEO, and he is a brother.
“BBDO only did advertising and offered services like creative and media. And we were providing the same ecosystem of marketers with services like marketing analytics, media research, events, health care communication, public relations, outdoor, AdTech, MarTech, etc.
So, we can serve all of our clients better with a unified structure than if BBDO only cared about one small segment. And both partners agreed that we would do our own things in a friendly way “Swamy said in the interview that the RK Swamy Hansa Group made a total of $100 million in sales.
The RK Swamy Hansa Group has offices in Bengaluru, Chennai, Delhi, Hyderabad, Kochi, Kolkata, and Mumbai, according to its website. A field network in 11 other cities helps with this. The US offices of Hansa Marketing Services are in Chicago, Illinois, and Portland, Oregon.
“We are one of the few companies that can really do Integration. Our Creative, Media, Digital, Events, and Retail teams all work under one Management, “on the website.
The Indian government and institutions like the LIC, RBI, and SBI are among the more than 200 big clients that the firm has worked for. Hawkins (which has been a client since 1985), Havells, Lloyd, TAFE, IndusInd bank, Shriram Group, Himalayas, MagicBricks, Tata Steel, Mahindra & Mahindra, Gemini Oils, and others are among its private sector clients.
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THAT’S HOW IT ALL BEGAN, FOLKS!
Sam Balsara called the late RK Swamy, who started the group, “the Grand Old Man of Indian Advertising.” He worked in advertising for 63 years, starting in 1940 when he joined J. Walter Thompson’s Indian Languages department. After living for a few years in Calcutta, he went back to Bombay.
In 1955, Swamy moved to Madras to start a new office for J. Walter Thompson. This was the beginning of the advertising industry in South India. R K Swamy left JWT after 33 eventful years. At the time, he was the company’s top director, and the company had become a leader in its field.
He started R K SWAMY Advertising Associates when he was 50 years old. In seven years, it had grown to cover the top five cities in India.
In 1986, the company made a deal with the BBDO Worldwide Network, which was a long time before these kinds of deals became popular in the business world.
A Founding Fuel article titled “Advertising in the U.S.” talks about the market for ads in the U.S “The hare and the tortoise” from July 28, 2022, said, “Most homegrown Indian advertising and communication groups have given up and sold out to large international networks like WPP, Publicis, Dentsu, and Omnicom, except for the R K Swamy Hansa group and maybe Madison Worldwide, which was started by the evergreen Sam Balsara. Ulka, Trikaya, Mudra, Rediff, and Chaitra’s original founders have left the scene one by one.”
The Securities and Exchange Board of India (SEBI), which oversees the capital markets, has given Zaggle Prepaid Ocean Services, Cyient DLM, Healthvista India, and Rashi Peripherals IPO the go-ahead to move forward with their IPO plans.
All of them got observation letters last week. Zaggle and Cyient subsidiary got theirs on March 29, and Healthvista and Rashi Peripherals got theirs on March 31. An update on the website of the market regulator on March 31 said that the SEBI sent its observations for Healthvista and Rashi Peripherals on March 31.
SEBI says that if a company files a draft red herring prospectus for an IPO and gets an observation letter back, it means that the market regulator has given the company permission to raise money through an IPO.
Zaggle Prepaid Ocean Services, a B2B SaaS fintech company, filed its draft red herring prospectus (DRHP) with the regulator in December 2022. It wanted to raise money through an initial public offering, which would include the sale of 1.05 crore equity shares by the company’s founders and investors.
Zaggle was founded in 2011. It makes financial products and solutions to help corporates, SMEs, and startups manage their business costs. The proceeds from the new issue will be used to find and keep customers, develop technology and products, pay off debts, and for other general business purposes.
Rashi Peripherals wants to raise Rs 750 crore by selling only new shares to the public. The company filed the preliminary paperwork for an IPO in January 2023.
The company said that between FY20 and FY22, in terms of revenue growth, it was one of the national distribution partners for global tech brands in India with the fastest growth.
Before sending its red herring prospectus to the Registrar of Companies, Rashi might think about putting up Rs 150 crore in a private placement. If the pre-IPO placement is done, the amount raised from the pre-IPO placement will be subtracted from the amount raised from the fresh issue.
The company will use the money from the new issue to pay off debts and meet general business needs, among other things.
The IT services company Cyient has a subsidiary called Cyient DLM. In January of this year, Cyient DLM filed draft papers to raise Rs 740 crore through an IPO. The IPO is just a fresh issue; there is no offer for sale. This means that the company will use all of the money, minus the costs of the issue.
Before filing the IPO papers with the Registrar of Companies, the company that offers services and solutions for electronic manufacturing may also think about a pre-IPO placement of Rs 148 crore. If the company does the said pre-IPO placement, the size of the new issue will be cut by the amount of the pre-IPO placement.
The funds from the fresh issue will be used to meet new needs for working capital, make capital investments, pay down debt, grow inorganically through acquisitions, and meet other general business needs.
Also, Read – On Day 2, Avalon Technologies IPO investors are lukewarm.
At the moment, Cyient owns it in its entirety.
Healthvista India, which provides healthcare outside of hospitals, filed its IPO papers in July of last year. The company wants to raise money by issuing new shares worth Rs 200 crore and letting investors buy up to 5.62 crore shares. This will be its first public offering.
The shareholders who are selling their shares in the IPO are Accel Growth III Holdings (Mauritius), Accel India III (Mauritius), Ventureast Life Fund III LLC, MEMG CDC Ventures, Qualcomm Asia Pacific Pte Ltd, Accel India V (Mauritius), and Sabre Partners Trust.
Healthvista is owned by all of its public shareholders. Accel Growth III Holdings (Mauritius) and Accel India III (Mauritius), with 14.92 percent and 10.51 percent stakes, are the two largest shareholders.
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The company will use the money from the fresh issue to meet the working capital needs of its important subsidiary, Medybiz Pharma, to pay off debts, to buy medical equipment, to market and build its brand, to grow through acquisitions, and for other corporate purposes.
Healthvista offers a wide range of out-of-hospital healthcare services under the brand name Portea. These services include primary care, care for the elderly and end-of-life care, intensive care unit (ICU) care, post-operative and post-hospitalization care, chronic care, care for mothers and babies, and cancer care.
According to the most recent report from Axis Capital, 50 companies have gotten comments from the capital markets regulator about their draft papers, which are still valid. After adding the extra 4 companies, the list grew to 54.
Avalon Technologies IPO On April 5, the second day of bidding, investors were still not very interested in Avalon Technologies’ first public offering. This was because the market for first public offerings is tough.
As of 9:45 a.m., NSE data showed that only 3% of the issue had been bought by retail investors. So far, investors have bid on 3,68,050 of the 1,14,63,854 shares that are up for grabs.
Also, Read – Sign up for Avalon Technologies for the long term: Arun Rathi
16 percent of the retail investor quota was taken up. Only 1% of the shares set aside for non-institutional investors have been asked for so far, while none have been asked for by Qualified Institutional Buyers.
Traders and investors have also been less busy this week because of the holidays. This, along with the unstable markets, makes it hard for the issue to succeed.
Avalon, like Amber Enterprises and Dixon Technologies, is a contract manufacturer. Analysts said that the company has a good mix of end-user industries and clients with strategic manufacturing locations. Its work involves designing, engineering, buying parts, and making them, all of which are complicated tasks that take a long time and make it hard for new companies to get in.
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The price range is between Rs 415 and Rs 436 for each share with a face value of Rs 2.
Avalon wants to raise Rs 865 crore through its IPO. This will be done by giving out new shares worth Rs 320 crore and letting promoters and other selling shareholders sell equity shares worth Rs 545 crore.
Analysts who are keeping an eye on the situation think that the company is in a high-growth industry. Avalon Tech is also a good investment because its prices aren’t as high as those of its other publicly traded companies.
Disclaimer: The investment experts on IPOINFO.IN give its own opinions and investment tips, not those of the website or its management. IPOINFO.IN tells its users that before making any investment decisions, they should check with certified experts.
Aeroflex Industries Ltd. has sent the Securities Exchange Board of India a draft red herring prospectus to raise about Rs 350 crore through initial public offerings.
Aeroflex Industries Ltd has filed a draft red herring prospectus with the Securities Exchange Board of India (Sebi) to raise about Rs 350 crore through an initial public offering.
The IPO includes a fresh issue of Rs 160 crore and an offer-for-sale of up to Rs 190 crore by the company’s existing shareholders and promoters. The OFS includes up to 12.3 million shares from Sat Industries Ltd and up to 5.2 million shares from Italica Global FZC. Italica Global FZC owns 6.52 percent of Sat Industries, while Sat Industries owns 92.18 percent of the company.
Also, Read – Sign up for Avalon Technologies for the long term: Arun Rathi
Rs 35 crore will be used to pay off debt, and Rs 84 crore will be used to meet the company’s working capital needs. The only lead manager for the issue is Pantomath Capital Advisors Pvt Ltd.
Aeroflex makes and sells metal flexible flow solutions that are good for the environment and serve both domestic and international markets. It sells its goods in more than 80 countries, including the United States and Europe.
Flexible flow solutions make it easier for things like air, liquids, and solids to move through industrial and commercial ecosystems. These solutions are very important for linking the beginning and end of different processes. Aeroflex has over 1,700 Stock Keeping Units (SKUs) for its products, which is a lot.
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The company just made bronze products and has more than 55 other products in the works. Due to the difficulty of research and product development, the wide range of uses for products, the need for technical expertise, the need for precision, and the long and strict processes for qualifying customers, Aeroflex’s business model makes it hard for new players to join and hard for existing customers to leave.
Sat Industries, which is also listed on BSE and NSE, owns Aeroflex. Aeroflex and Sat Industries Limited both have a history of paying dividends. Sat Industries Limited has a track record of growing many different kinds of businesses by buying them up.
In FY22, the company made Rs 240.80 crore, which is more than the Rs 144.77 crore it made in FY21. Its net profit for the period was Rs 27.51 crore, compared to Rs 6.01 crore the previous year. Its net profit margin also went up from 4.15 percent to 11.41 percent. As of January 2023, the company owed a total of Rs 41.75 crore in debt.
The report that Anand Rathi compiled on Avalon Technologies has been made public. The research company’s report as of April 3, 2023 includes a recommendation to ” Subscription – Long term ” the initial public offering (IPO).
Also, Read – Day 1 investor interest in Avalon Technologies public issuance is low.
IPO report on Avalon Technologies written by Anand Rathi.
Avalon Technologies is one of the top fully integrated Electronic Manufacturing Services (EMS) firms in India. The company focuses on providing high value precision manufactured products and has end-to-end capabilities in delivering box build solutions. They offer a complete product and solution suite to certain original equipment manufacturers (OEMs) around the world, including OEMs located in the United States of America, China, the Netherlands, and Japan. This includes everything from the design and assembly of printed circuit boards to the production of fully functional electronic systems. 1999 marked the beginning of the firm’s operations as a pure play PCB assembler with a specific focus on their capabilities. Since then, the company has become vertically integrated to include a variety of different products and services. They have a significant level of vertical integration in the EMS industry, which includes PCB assembly, cable assembly and wire harnesses, sheet metal fabrications and machining, injection molded plastics, magnetics, and end-to-end box build. This level of integration also includes end-to-end box build.
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Valuation and Forecast
At the high end of the price range, the company is valued at a price-to-earnings ratio of 41x, has a market cap of 28,467 million after the issuance of equity shares, and has a return on net worth of 85%. We have come to the conclusion that the company’s valuation is accurate, and as a result, we are recommending a rating of “Subscribe – Long term” for the IPO.
Disclaimer: The opinions and financial advice presented on ipoinfo.com by investment professionals, brokerage houses, and rating agencies are those of the individual authors and do not represent the views of the website or its administration in any way. Users of IPOinfo are cautioned against making any investment decisions without first consulting with qualified professionals.
On April 3, the first day of bidding for Avalon Technologies’ first public offering, not many investors were interested, even though analysts were still optimistic about the company.
As of 12:30 p.m., BSE data showed that 1% of the issue had been bought by retail investors. So far, investors have bid on 1,47,662 of the 1,14,63,854 shares that are up for grabs.
7 percent of the retail investor quota was taken, and a few people applied for the non-institutional investor quota. However, no one has yet applied for the Qualified Institutional Buyers quota.
Also, Read – Samhi Hotels re-files IPO with Sebi to raise Rs 1,000 crore.
Avalon is an integrated EMS provider whose clients come from a wide range of end-user industries and have factories in strategic places. Its scope of work requires complex designing, engineering, buying parts, and making them, which creates long lead times and, as a result, barriers to entry.
Price range has been set between Rs 415 and Rs 436 per share with a face value of Rs 2.
Avalon wants to raise Rs 865 crore through its IPO. This includes a fresh issue of shares worth Rs 320 crore and an offer-for-sale of equity shares worth Rs 545 crore by promoters and other selling shareholders.
Analysts who are keeping an eye on the situation think that the company is in a high-growth industry. Avalon Tech is also a good investment because its prices aren’t as high as those of its other publicly traded companies.
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Sumeet Shah of Reliance Securities pointed out that based on annualized financials for FY23, the IPO is worth 55.5x P/E at the high end of the price range, which is less than its peers. Even though this PE multiple is lower than its peers, some people don’t find it to be that appealing.
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