Know the company profile, GMP before investing

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IPO of Syrma SGS Technology: The initial public offering (IPO) of Chennai-based engineering and design firm Syrma SGS Tech will hit primary markets on Friday, August 12. In accordance with the Red Herring Prospectus (RHP) of Syrma SGS Technology’s IPO, the public offering will remain open for auction until August 18, 2022. The anchor book will be open for one day on August 11.

Syrma is a leading electronic systems design and manufacturing (“ESDM”) company, focused on technology solutions and original design manufacturing (“ODM”) activities. The company’s business model starts from product concept design and focuses on each segment of the industry’s overall value chain.

Through its pre-IPO placement, Syrma SGS Technology has already raised Rs 110 crore for 37.93 lakh shares before filing the red herring prospectus. The said fundraising was priced at Rs 290 per share, a premium of 32% over the issue price of Rs 220.

Price range

Syrma SGS Tech has set a price range for the offer at Rs 209 and Rs 220 per share. The initial public offering includes a new issue of Rs 766 crore and a sale offer of 33.69 lakh shares.

Lot size

Investors can bid for a lot size of 68 shares and thereafter in multiples of 68 shares. Those planning to invest in the show will need to make a minimum investment at the upper end of the price range will be Rs 14,960 per lot and Rs 1.94,480 would be the maximum investment against 13 lots as they are permitted to invest up to Rs 2,000,000.

company finance

Syrma posted 16.6% year-on-year growth in pro forma profit to Rs 76.46 crore for the year ended March 2022 on the back of strong revenue and operational performance. “Proforma revenue from operations increased by 43% to Rs 1,266.6 crore and EBITDA increased by 23% to Rs 143.70 crore from the year ending March 2021,” said Axis Securities.

Main forces

Syrma is a leading electronics design and manufacturing services company by revenue for fiscal year 2021-2021, driven by focus on quality and customer relationship. It has also demonstrated consistent growth in revenue and profitability.

“Their financial situation illustrates not only the growth of their operations over the years, but also the effectiveness of the administrative and cost management protocols they have in place,” Axis Securities said.

The company is diverse and continues to evolve and expand its product portfolio and service offerings for customers in various industries, supported by strong R&D capabilities, the note adds.

“Syrma has established and will continue to focus on building long-standing relationships with well-known customers in the end-use industries they serve. The company is led by a management team with extensive experience in the EMS industry with a proven track record,” the note reads.

GMP today

Syrma shares are also available on the gray market. According to market watchers, shares of Syrma SGS Technology are available at a premium of Rs 30 on the gray market today. SGS Technology IPO’s Gray Market Premium (GMP) today is Rs 30, Rs 3 higher than its yesterday morning GMP of Rs 27. However, as today is a stock market holiday, Syrma SGS Technology IPO GMP is expected to remain at Rs 30 until the Indian stock market reopens on Wednesday, experts have said.

Allocation of IPO shares and listing date

The company will finalize the basis for the share allotment by August 23 and initiate redemptions to unsuccessful investors by August 24. The shares will be credited to eligible investors’ Demat accounts by August 25.

And finally, trading of shares on the BSE and NSE will start from August 26th.

About the company

Axis Securities in its IPO note said, “The company’s manufacturing facilities in Tamil Nadu are placed in SEZs, which enables them to take advantage of specific tax and other incentives in relation to products produced in these facilities. All manufacturing plants are certified, including ISO 14001 and ISO 9001.

Syrma is the first in India to manufacture Radio Frequency Identification (“RFID”) products and continues to lead the industry. Additionally, the company is recognized as a leader in memory modules with deep expertise.

DAM Capital Advisors, ICICI Securities and IIFL Securities are the lead managers of the offering, while Link Intime India is the registrar of the offering.

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