Elin Electronics’ Rs 475 crore IPO opened for subscription on 20 December and the issue has been booked over 50% on day 2, with total bids of 0.55x. Qualified institutional buyers (QIBs) haven’t demonstrated much interest in the issue so far, subscribing for only 1% of their reserved portion. Retail investors, on the other hand, bid for 85% of the 71,04,693 shares reserved for RIIs. The NII portion garnered 0.62x bids so far. The IPO will close for subscription on Thursday, 22 December.
The issue comprises a fresh issue of equity shares totalling Rs 175 and an offer-for-sale (OFS) of Rs 300 crore. 50% of the IPO is reserved for QIBs, while NIIs can bid for 15% and retail investors for the remaining 35%. The IPO price band has been fixed at Rs 234-247 per equity share and retail investors can apply for minimum 60 shares, and a maximum of 13 lots of 60 shares each, totalling Rs 192,660. The issue is commanding a grey market premium (GMP) of Rs 45.
Prior to opening for public subscription, Elin Electronics raised Rs 142 crore from anchor investors, of which 70.18% was allocated to 4 domestic AMCs through 11 different schemes. These AMCs are SBI Mutual Fund, Kotak Mutual Fund, Aditya Birla Sun Life Asset Management and PGIM India Mutual Fund. Following the issue, the shareholding of the promoters will fall to 32.93% from 53.98%.
Analysts have advised investors to subscribe to the issue. “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, the 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, the 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,” said Hem Securities in a report.
Elin Electronics is a manufacturer and assembles electronic end-to-end product solutions for major brands of lighting, fans, and kitchen appliances. The company has an original equipment manufacturer (OEM) as well as an original design manufacturer (ODM) business model.
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