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Syrma SGS Technology to launch IPO on August 12, fresh issue size at Rs 766 crore

Moneycontrol logo Moneycontrol 06-08-2022 Sunil Shankar Matkar
Syrma SGS Technology to launch IPO on August 12, fresh issue size at Rs 766 crore © Moneycontrol Syrma SGS Technology to launch IPO on August 12, fresh issue size at Rs 766 crore

Engineering and design company Syrma SGS Technology is slated to launch its maiden public issue on August 12. It will be the first IPO in the last two-and-half-month, especially after the stability in the secondary market. The price band for the offer will be announced on August 8.

The initial public offering comprises fresh issuance of shares worth Rs 766 crore, and an offer for sale of 33.69 lakh equity shares by promoter Veena Kumari Tandon.

Before filing the red herring prospectus, the company had raised Rs 110 crore through its pre-IPO placement of 37.93 lakh equity shares, at a price of Rs 290 per share.

The offer will close on August 18. The anchor book will be opened for a day on August 11.

Half of the issue size is reserved for qualified institutional investors including anchor book, 15 percent for non-institutional investors, and the remaining 35 percent for retail investors.

Syrma SGS is a technology-focussed engineering and design company engaged in turnkey electronics manufacturing services (EMS), specialising in precision manufacturing for diverse end-use industries, including industrial appliances, automotive, healthcare, consumer products, and IT industries.

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The portfolio of products provided by the company to several industries is printed circuit board assemblies (PCBA), radio frequency identification (RFID) products, electromagnetic and electromechanical parts, motherboards, DRAM modules, solid state drives, USB drives, and other memory products.

Syrma clocked a 16.6 percent on-year growth in proforma profit (which assumes the acquisition of SGS Tekniks and Perfect ID in April 2019) 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 percent to Rs 1,266.6 crore and EBITDA increased by 23 percent to Rs 143.70 crore compared to the year ending March 2021. EBITDA is earnings before interest, tax, depreciation, and amortisation.

In the fiscal year gone by, the company provided products to over 200 customers of which 16 customers have been associated with the company for more than 10 years, contributing Rs 262.8 crore of proforma revenue in FY22. Its marquee customers include TVS Motor Company, A O Smith India Water Products, Robert Bosch Engineering, and Business Solution, Eureka Forbes, CyanConnode, Atomberg Technologies, Hindustan Unilever, and Total Power Europe B.V.

Also read - SBI Q1 earnings: Net profit of Rs 6,068 crore, misses street estimates

Promoters Sandeep Tandon, Jasbir Singh Gujral, Veena Kumari Tandon, and Tancom Electronics - hold 57.12 percent equity stake, while investors including South Asia Growth Fund II, Holdings LLC, and Malabar Select Fund own 7.53 percent and 1.22 percent stake, respectively in the company at the time of filing RHP.

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 equity shares will be available for trading on the bourses from August 26.

DAM Capital Advisors, ICICI Securities, and IIFL Securities are the book-running lead managers for the offer.

The last IPO that was launched this year was in May by Aether Industries. So far, 16 companies have successfully closed their main board public issues in the current calendar year.

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