Avalon Technologies disappointed investors on its debut as the stock closed with nearly 9 percent loss on April 18. The subdued market conditions and muted response to the IPO from investors barring QIBs may be key reasons for the pathetic performance of the stock.
The stock opened at Rs 431 on the BSE and did not see its issue price of Rs 436 in the entire trading session. It touched an intraday high of Rs 435.30 in early trade and extended selling pressure as the day progressed to hit a day's low of Rs 387.75.
It finally settled at Rs 397.45, down 8.84 percent with trading volumes of 3.17 lakh shares.
On the National Stock Exchange, the closing price was Rs 396, down 9 percent and the trading volume was 47.58 lakh shares.
Incorporated in 1999, the electronic manufacturing services company has raised Rs 865 crore via its maiden public issue, comprising fresh issuance of shares worth Rs 320 crore. The price band for the offer was Rs 415-436 per share.
Avalon Technologies is a fully integrated EMS company with end-to-end operations that deliver box-build solutions in India. The company operates in a business with high entry barriers and has a global delivery footprint.
"Despite its strong and stable financial performance, Avalon Technologies experienced a decline in its PAT margin during the first eight months of FY22 and currently has a high debt ratio. Investors with a high-risk tolerance may consider holding Avalon shares long-term," Pravesh Gour of Swastika Investmart said.
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