Syrma SGS Technology IPO Opens Today: Check Key Details And Should You Subscribe?

The IPO of Syrma SGS Technology that opened Friday (August 12) will remain open for subscription till August 18.

Syrma SGS Technology IPO Opens Today: Check Key Details And Should You Subscribe?

Here are the finer details on the issue and whether or not you should consider subscribing to it:

1. Issue details: The company through the issue plans to raise a total of Rs. 840 crore by selling its scrip in the share price band of Rs. 209-220 per share. The company has fixed 50% of the net offer for QIBs and 15% for NIBs, 15% for NIIS and the balance 35% for retail investor class.

2. Issue objectives: The net proceeds from the fresh equity issuance will be utilised for funding capital expenditure requirements to expand manufacturing and R&D facilities and to fund long-term working capital requirements.

3. About Syrma SGS: The company is a technology-focused engineering and design company engaged in turnkey electronics manufacturing services (EMS). In addition, it also provides custom RFID and magnetics products. The company's all-inclusive product range finds applications across varied end-use industries. The company's clientele are from industries including automotive, healthcare, IT, industrial appliances, energy management, water purification, power supply and consumer products industries.

4. Company's financials: In the Fy22 period, the company's revenues were at Rs. 2521.2.million. Further of the total revenue during the fiscal, 39% had been accounted by the company's riginal design manufacturing services.

5. Brokerages' view on the IPO: There is a divided view on the issue but majorly brokerages suggest subscribing to the issue but at the same there is given a word of caution on the fully priced valuations in the growing sector.

Arafat Saiyed, Senior Research Analyst, Reliance Securities said that the IPO is available at a discount to pre-IPO placement price. Further it is among the most thriving Indian ESDM entities having marquee customer base. He gave a 'Subscribe' rating to the issue and said, "Syrma is well placed to capitalize on domestic and global opportunities. Owing to superior technology-based manufacturing domain, healthy product mix, diversified product portfolio, strong R&D capabilities, and capacity addition".

Suggesting buy with caution Choice Broking says, "The company reported a positive cash flow from operations in FY20 and FY21. Higher operating assets mainly led to a negative operating cash flow in FY22. However, average operating cash flow during the period stood at Rs. 60.1cr. Financial liabilities increased by 34.7% CAGR, however, on account of higher equity base debt-to-equity ratio improved from 0.3x in FY20 to 0.2x in FY22. Pre-issue average RoIC and RoE stood at 13.6% and 15%, respectively."

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