Syrma SGS Technology IPO: The Initial Public Offering (IPO) of the Chennai-based engineering and design company Syrma SGS Tech is going will hit primary markets on Friday, August 12. As per the Red Herring Prospectus (RHP) of Syrma SGS Technology IPO, the public issue will remain open for bidding till 18th August 2022. The anchor book will be opened for a day on August 11.
Syrma is one of the leading Electronics system design and manufacturing (“ESDM”) company with a focus on technology-based solutions and Original design manufacturer (“ODM”) business. The company’s business model starts from product concept design and focuses on every segment of the overall industry value chain.
Through its pre-IPO placement, Syrma SGS Technology has already raised Rs 110 crore for 37.93 lakh shares before filing the red herring prospectus. The said fundraising was at a price of Rs 290 per share, a 32 per cent premium to the issue price of Rs 220.
Syrma SGS Tech has fixed a price band for the offer at Rs 209 and Rs 220 per share. The initial public offering comprises a fresh issue of Rs 766 crore and an offer for sale of 33.69 lakh equity shares.
Investors may bid for a lot size of 68 shares and thereafter in multiples of 68 equity shares. Those planning to invest in the issue will have to make a minimum investment at the upper end of the price band will be Rs 14,960 per lot and Rs 1,94,480 would be the maximum investment against 13 lots as they are allowed to invest up to Rs 2 lakh.
Syrma reported a 16.6 per cent year-on-year growth in proforma profit 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 per cent to Rs 1,266.6 crore and EBITDA increased by 23 per cent to Rs 143.70 crore compared to the year ending March 2021," Axis Securities said.
Syrma is one of the leading design and electronic manufacturing services companies in terms of revenue in Fiscal 2021, driven by the focus on quality and customer relationships. It has also demonstrated consistent growth in terms of revenue and profitability.
“Their financial position illustrates not only the growth of their operations over the years, but also the effectiveness of the administrative and cost management protocols that they have implemented," Axis Securities said.
The company is diversified and continuously evolving and expanding its product portfolio and service offerings catering to customers across various industries, backed by strong R&D capabilities, the note added.
“Syrma has established and will continue to focus on strengthening long-standing relationships with well-known customers across the end-use industries that they cater to. The company is led by a management team with extensive experience in the EMS sector with a proven track record of performance," the note said.
Shares of Syrma are also available in the grey market as well. According to market observers, shares of Syrma SGS Technology are available at a premium of Rs 30 in grey market today. SGS Technology IPO grey market premium (GMP) today is Rs 30, which is Rs 3 up from its yesterday morning GMP of Rs 27. However, as today is a stock market holiday, Syrma SGS Technology IPO GMP is expected to remain at Rs 30 till the Indian stock market reopens on Wednesday, experts said.
IPO Share Allotment and Listing Date
The company 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.
And finally, the trading in equity shares on the BSE and NSE will start with effect from August 26.
About the Company
Axis Securities in its IPO note said: “The company’s manufacturing facilities in Tamil Nadu are placed in SEZs, allowing them to take advantage of specific tax and other incentives in relation to the products manufactured at these facilities. All the manufacturing facilities are certified, including ISO 14001 and ISO 9001.
Syrma is the first in India to manufacture Radio Frequency Identification (“RFID”) products and continues to lead the industry. Also, the company is recognised as a leader in memory modules with deep expertise.
DAM Capital Advisors, ICICI Securities, and IIFL Securities are the book-running lead managers for the offer, while Link Intime India is the registrar to the offer.