Syrma SGS Technology IPO (Initial Public Offer), which was subscribed 32.61 times on the final day of the issue, is expected to make a decent debut on the exchanges, as per experts. Shares of The IPO Syrma SGS Technology IPO is scheduled to make debut on the bourses tomorrow, August 26, as per Upstox. of the Chennai-based engineering and design company engaged in electronics manufacturing services (EMS) has drawn bids for 93,14,84,536 shares against 2,85,63,816 shares on offer, according to NSE data. The Qualified Institutional Buyers (QIBs) had bid for 87.56 times on the last day, while portion reserved for non-institutional investors was subscribed 17.50 times and Retail Individual Investors (RIIs) category was filled 5.53 times against their respective quotas.
The company has priced the IPO in the range of Rs 209-220 per share. the initial public offering comprised fresh issue of equity shares aggregating to Rs 766 crore and an offer for sale of up to 33,69,360 equity shares
Speaking on the listing expectations, Ravi Singhal, CEO, GCL, said the stock looks good. “It must list around Rs. 320 on the exchanges,” he said.
Long-term investors must keep themselves invested, while short term traders can book full profit, he suggested.
Manoj Dalmia, founder and director, Proficient equities Private Limited, expected the listing in the range of Rs 260-270 range.
“Based on its financial data and earnings, the issue is priced at a P/E of 50+ even at lower IPO pricing. The segment in which SSTL is operating is also poised for bright prospects ahead and investors may consider it with medium to long-term perspectives,” he said.
“Syrma SGS Teech is one of India’s leading and fastest-growing Electronics system design and manufacturing (ESDM) companies. With a huge focus on R&D-based innovation and an experienced management team, the company has managed to enter into various growing segments like PCBA, Radio Frequency Identification (RFID), Electromagnetic and electromechanical parts, and other information technology-related products, including motherboards, DRAM modules, SSD and USB drives,” Punit Patni, Equity Research Analyst, Swastika Investmart Ltd., said on rationale behind his recommendation.
Furthermore, the company’s business model starts from product concept design and focuses on every segment of the overall industry value chain; this gives them a competitive advantage over traditional OEM or ODM-based companies that focus on a single process or certain stages of production, thus creating lasting relationships with its marquee clients, said Patni.
He said geographically diversified manufacturing locations further enable them to efficiently cater to the requirements of their customers in north and south India.
Additionally, the business has had success using inorganic means to add new product lines and expand its geographic reach, he said.
“The issue has been priced at a premium valuation, which is acceptable given its growth potential and competitive advantages. And therefore, we recommend investors to subscribe the issue,” he added.
Earlier, Zee Business Managing Editor Anil Singhvi said that experienced and quality management and strong growth outlook of the company are two positive triggers for this IPO. He said the company saw a downtrend in margins. “Valuation appears reasonable, but not very attractive. Investors with high-risk threshold can apply for long-term,” he had recommended.