Elin Electronics IPO opened for public subscription today, 20 December, and it will remain open for bidding till 22 December 2022. The company has fixed the IPO price band at Rs 234-247 per equity share and the company aims to raise Rs 475 crore from this public offer A bidder will be able to apply for the IPO in lots. One lot of the public issue will comprise 60 company shares and a retail investor can apply for a minimum of one lot and maximum of 13 lots. Elin Electronics IPO shares were commanding a grey market premium (GMP) of Rs 43 on Monday, according to people dealing in unlisted securities.
The Electronics manufacturing services provider on Monday mopped up Rs 142.5 crore via anchor book ahead of the IPO. The company in its BSE filing said it has finalised allocation of 57.69 lakh shares to anchor investors at the upper end of the price band of Rs 247 per equity share. Total of 15 investors invested in the company via anchor book including SBI Mutual Fund, Kotak Mahindra Trustee, SBI Life Insurance, Aditya Birla Sun Life Trustee, Pinebridge Global Funds, and PGIM India. Out of the total allocation to the anchor investors, 40.48 lakh shares were allocated to 4 domestic mutual funds through a total of 11 schemes.
“Based on FY22 earnings the company is valued at 31.3x P/E, 16.8x EV/EBITDA and 1.2x EV/Sales. In view of the company’s dual OEM and ODM based business model, diverse products and services portfolio, healthy financials, focus on R&D and strong growth potential given the large addressable market, we recommend ‘SUBSCRIBE’ to the issue.”
“The promoter group is offloading their stake in this IPO. Company will utilize Rs 175 crore towards debt repayment and capex. Hence, debt level is expected to reduce further post the IPO. In terms of the valuations, on the higher price band, EEL demands a P/E multiple of 29.7x based on H1FY23 post issue fully diluted EPS which seems at higher level. Given the valuation at higher level, small scale of operation compared to the peers and muted financial growth, we have Neutral view on this IPO.”
“Company has established market position in key verticals including leadership in fractional horsepower motors with diversified products resulting in a de-risked business model. Also, company’s entrenched relationships with a marquee customer base & high degree of backward integration resulting in higher efficiencies, enhanced quality of products and customer retention capability. Along with this, company’s consistent and strong track record of financial performance is making this issue attractive. Hence, looking after all above, we recommend “Subscribe” on issue.”
“One can subscribe to IPO for long term as Elin is a leading electronics manufacturing services (EMS) manufacturer of end-to-end product solutions for major brands of lighting, fans, and small/ kitchen appliances in India, and is one of the largest fractional horsepower motors manufacturers in India. In addition, they are one of the key players in LED lighting and flashlight with EMS market share of approximately 7% in FY2021 and is also one of the key players in small appliances vertical with EMS market share of 10.7% in FY2021.”
The company is expected to finalise share allotment on 27 December and the shares are likely to be listed on BSE and NSE on 30 December 2022. KFin Technologies Limited has been appointed as the official registrar of the public offer.
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