No sparks for Elin Electronics, lists at 1.5% discount to issue price at Rs 243

The last listing for this calendar year - Elin Electronics - failed to create sparks on Dalal Street as the shares opened at 1.5 percent discount to issue price on December 30.

The stock started trading at Rs 244, against an issue price of Rs 247 on the NSE, and the opening price on the BSE was Rs 243.

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Between December 20 and 22, Elin’s public issue was subscribed 3.09 times, with qualified institutional buyers (QIBs) putting in applications for 4.51 times the allotted quota, high networth individuals (HNIs) 3.29 times, and retail investors 2.2 times.

At the upper end of the price band, the issue was priced attractively at 31x FY22 earnings, while peers Dixon Technologies and Amber Enterprises are trading at 140x and 62.8x FY22 earnings, respectively.

Also Read: Elin Electronics IPO: Is low valuation reason enough to invest?

As per the company’s Red Herring prospectus, the company’s top five customers account for about 65.43 percent of revenue from operations and top 10 customers account for about 80 percent. Its largest customer (across product verticals) accounts for 27-30 percent of the total revenues. This client concentration is the company's biggest risk, believe analysts.

Elin’s current market share stands at 10.7 percent for small appliances, 12 percent in fractional horsepower motors, 7.2 percent in LED lighting and flashlights, and 0.6 percent in fans. It has different competitors in each product vertical.

During FY20-22, Elin’s revenue and net profit clocked a CAGR of 18 percent and 19 percent, respectively, while the EBITDA margin remained flat at ~7.1 percent.

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