Avalon Technologies Limited IPO Should You Apply What Are The Details
This blog discusses Avalon Technologies' upcoming IPO, its growth prospects, and financial details. While investing in the stock market can be a lucrative venture, it requires knowledge and skills to make informed decisions. Money Plant Trading Academy provides courses in the stock market and technical analysis in Ahmedabad to equip individuals with the necessary skills to navigate the market. By enrolling in these courses, individuals can improve their chances of making profitable investments.
Avalon Technologies, a leading fully integrated electronic manufacturing services (EMS) company, is set to launch its initial public offering (IPO) on April 3, with the subscription window closing on April 6. The company has 12 manufacturing units across India and the US, and provides end-to-end service solutions to clients such as Collins Aerospace, Zonar Systems Inc, Kyosan India, and eInfochips. Its offerings include cable assembly and wire harnesses, sheet metal fabrication, machining, magnetics, and injection moulded plastics.
The EMS market in India is valued at Rs 1.46 lakh crore in FY22 and is expected to grow at a CAGR of 32.3% to reach Rs 4.5 trillion by FY26, indicating strong growth prospects for Avalon Technologies.
The IPO size has been reduced to Rs 865 crore from the earlier planned Rs 1,025 crore, as the company completed a pre-IPO placement of Rs 160 crore. The IPO comprises Rs 320 crore from the fresh equity issue and an Offer For Sale (OFS) of shares up to Rs 545 crore by promoters and existing shareholders.
Promoters Kunhamed Bicha and Bhaskar Srinivasan will sell equity shares worth up to Rs 131 crore and Rs 172 crore, respectively, under the OFS. Other selling shareholders include T P Imbichammad and Mariyam Bicha, part of the promoter group.
For the period ended November 2022, the company reported revenue of Rs 584 crore and profit after tax (PAT) of Rs 34 crore.
The proceeds from the fresh issue will be used towards debt payment, funding working capital requirements, and general corporate purposes.
JM Financial, DAM Capital Advisors, IIFL Securities, and Nomura Financial Advisory and Securities (India) are the merchant bankers for this IPO.
About 75% of the issue is reserved for qualified institutional buyers (QIBs), while 15% of the offer is reserved for non-institutional investors. The remaining 10% is reserved for retail investors.
The company's shares are reportedly being enquired for a premium of Rs 25-30 in the unlisted market, indicating strong investor interest. However, the price band for the IPO has not been announced yet.
The company sources its raw material from suppliers, who may not perform their contractual obligations in a timely manner or at all, which poses a risk. Additionally, the company is dependent on a few customers for a significant portion of its revenues.
Avalon Technologies is a leading fully integrated electronic manufacturing services (EMS) company set to launch its initial public offering (IPO) on April 3, with the subscription window closing on April 6. The IPO size has been reduced to Rs 865 crore, and the proceeds will be used towards debt payment, funding working capital requirements, and general corporate purposes. The company sources its raw material from suppliers, and is dependent on a few customers for a significant portion of its revenues.
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