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Syrma SGS Technology IPO Opens Today: Check Key Details And Should You Subscribe?

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The IPO of Syrma SGS Technology that opened Friday (August 12) will remain open for subscription till August 18.

 
Syrma SGS Technology IPO Opens: Check Key Details And Should You Subscribe?

Here are the finer details on the issue and whether or not you should consider subscribing to it:

1. Issue details: The company through the issue plans to raise a total of Rs. 840 crore by selling its scrip in the share price band of Rs. 209-220 per share. The company has fixed 50% of the net offer for QIBs and 15% for NIBs, 15% for NIIS and the balance 35% for retail investor class.

2. Issue objectives: The net proceeds from the fresh equity issuance will be utilised for funding capital expenditure requirements to expand manufacturing and R&D facilities and to fund long-term working capital requirements.

3. About Syrma SGS: The company is a technology-focused engineering and design company engaged in turnkey electronics manufacturing services (EMS). In addition, it also provides custom RFID and magnetics products. The company's all-inclusive product range finds applications across varied end-use industries. The company's clientele are from industries including automotive, healthcare, IT, industrial appliances, energy management, water purification, power supply and consumer products industries.

4. Company's financials: In the Fy22 period, the company's revenues were at Rs. 2521.2.million. Further of the total revenue during the fiscal, 39% had been accounted by the company's riginal design manufacturing services.

5. Brokerages' view on the IPO: There is a divided view on the issue but majorly brokerages suggest subscribing to the issue but at the same there is given a word of caution on the fully priced valuations in the growing sector.

 

Arafat Saiyed, Senior Research Analyst, Reliance Securities said that the IPO is available at a discount to pre-IPO placement price. Further it is among the most thriving Indian ESDM entities having marquee customer base. He gave a 'Subscribe' rating to the issue and said, "Syrma is well placed to capitalize on domestic and global opportunities. Owing to superior technology-based manufacturing domain, healthy product mix, diversified product portfolio, strong R&D capabilities, and capacity addition".

Suggesting buy with caution Choice Broking says, "The company reported a positive cash flow from operations in FY20 and FY21. Higher operating assets mainly led to a negative operating cash flow in FY22. However, average operating cash flow during the period stood at Rs. 60.1cr. Financial liabilities increased by 34.7% CAGR, however, on account of higher equity base debt-to-equity ratio improved from 0.3x in FY20 to 0.2x in FY22. Pre-issue average RoIC and RoE stood at 13.6% and 15%, respectively."

GoodReturns.in

Story first published: Friday, August 12, 2022, 23:10 [IST]
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