Electronic manufacturing services company Avalon Technologies Ltd’s Rs 865-crore initial public offering (IPO) will open for subscription on April 3.
The firm cut the IPO size to Rs 865 crore from Rs 1,025 crore. The IPO, which will close on April 6, consists of a fresh issue of Rs 320 crore and an offer for sale (OFS) of shares worth Rs 545 crore.
Kunhamed Bicha will offer shares worth up to Rs 131 crore for sale, TP Imbichammad Rs 16 crore; Mariyam Bicha up to Rs 10 crore and Anand Kumar and Luquman Veedu Ediyanam will each tender shares worth up to Rs 75.50 crore while Seshu Kumar will offer Rs 65 crore worth of shares.
Anchor investors' bidding will open on March 31.
The allotment will be done on April 12 and shares will be credited to the accounts of successful bidders on April 17, the firm has said. The company will make its market debut on April 18.
The company plans to use Rs 145 crore from the fresh issue to pay its debt and that of its material arm Avalon Technology and Services Pvt Ltd.
As of January 2023, Avalon Technologies’ borrowings on the consolidated basis stood at Rs 324.12 crore.
The firm also plans to use Rs 90 crore for working capital requirement. As of January 2023, the aggregate amount sanctioned by the banks to its firm under the fund-based working capital facilities amounted to Rs 152.69 crore on a standalone basis.
JM Financial, DAM Capital Advisors, IIFL Securities and Nomura Financial Advisory and Securities India are the lead managers to the issue.
The reduction in the IPO size was a result of the pre-IPO placement carried out by Avalon Technologies, which took place between October 2022 and February 2023, and amounted to Rs 160 crore. The pre-IPO placement involved participation from investors such as UNIFI Financial Private Limited, Ashoka India Equity Investment Trust Plc, and India Acorn Fund Ltd.
The firm is a leading fully integrated Electronic Manufacturing Services (EMS) company with end-to-end capabilities in delivering box-build solutions in India with a focus on high-value precision-engineered products, the red herring prospectus said.
It provides a full stack product and solution suite, right from printed circuit board (PCB) design and assembly to the manufacture of complete electronic systems (box build) to global original equipment manufacturers (OEMs), including those in the US, China, The Netherlands and Japan.
The firm has 12 manufacturing facilities in India and the US. It specialises in manufacturing and providing design support for critical integrated assemblies, sub-assemblies, components and enclosures for multiple industry verticals
For FY22, its total income increased to Rs 851.65 crore from Rs 695.90 crore a year ago. Net profit for the year stood at Rs 68.16 crore against Rs 23.08 crore in the previous year. The EBITDA margin for the year improved to 11.6 percent from 9.58 percent in the previous year.
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