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Elin Electronics IPO opens for subscription: Here's all you need to know

market | Dec 20, 2022 7:53 AM IST

Elin Electronics IPO opens for subscription: Here's all you need to know

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The Rs 475 crore IPO will comprise of fresh issue of Rs 175 crore as well as an offer for sale (OFS) of not more than Rs 300 crore.

Elin Electronics' Rs 475 crore initial public offering (IPO) opened for subscription today, December 20.  The issue will close on December 22. Ahead of its IPO, the company has raised Rs 142 crore through anchor investors. A total of 15 investors, including SBI Mutual Fund, Kotak Mahindra Trustee, SBI Life Insurance, Aditya Birla Sun Life Trustee, and PGIM India, invested in the IPO.

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The electronics manufacturing services company has fixed the price band between Rs 234 and Rs 247 apiece.
The Rs 475 crore IPO — revised from earlier Rs 760 crore — will comprise of fresh issue of Rs 175 crore as well as an offer for sale (OFS) of not more than Rs 300 crore. JM Financial Ltd and Axis Capital Ltd are the book runners for the offer, while KFin Tech is the appointed registrar.
According to brokerage Angel One, "The IPO is priced at 24.41x with annualized EPS of 10.12 for H1FY23 calculated at the upper price band of Rs 247. Issue is fully priced but appears cheap against listed peers thus expecting decent listing gains."
Brokerage house Anand Rathi recommends subscribe-long term call for the IPO.  "Elin has a well-diversified product verticals across variety of EMS products ranging from applications in lighting to appliances to medical
devices. Revenue from operations grew at a CAGR of 18 percent over FY 20- FY 22," the brokerage house has noted.
Elin Electronics IPO Details:
Issue OpensDecember 20
Issue ClosesDecember 22
IPO Size (Rs crore)475
NatureFresh Issue + OFS
Price Band (Rs)234 - 247
The Delhi-based Elin is a leading electronics manufacturing services (EMS) manufacturer of end-to-end product solutions for major brands of lighting, fans, and small/ kitchen appliances in India, and leading fractional horsepower motors manufacturers in India with a 12 percent market share in the financial year 2021.
The company's clientele includes Philips, Panasonic, Usha, Havells, and Bosch.
Post the issue, the shareholding of the company's promoter and promoter group would come down to 32.93 percent from 53.98 percent earlier.
The company intends to utilise Rs 88 crore from the IPO proceeds to repay debt. The company had net debt of Rs 102.40 crore as of September 2022. Another Rs 37.8 crore will be used in capex to upgrade and expand the company's existing facilities at Ghaziabad, Uttar Pradesh and Goa. The remaining funds will be used for general corporate purposes.
If the company's shares list at the upper end of the IPO price band, the company's market capitalisation will range between Rs 1,171 crore to Rs 1,227 crore.
Talking to CNBC-TV18, Akash Sethia, Head-Strategy, Elin Electronics said that the company is working towards bringing down revenue concentration. “We worked on bringing that down and we are cognizant of that fact. About two years back, probably the top five customers contributed to about 75 percent of revenues. As things stand today that number is probably down between 60 and 65 percent and our endeavour and focus is to further bring it down over the next few years to close to 50 percent.”
Sethia said that the company we will be debt free post the IPO. He added, "While we intend to use out of the fresh issue of Rs 175 crore approximately Rs 40 crore towards capex, it is just pertinent to point out that over the past 3-3.5 years, we have already done a fairly large capex of approximately Rs 125 crore. So, going forward, we do not expect a material capex to come in.”
Key product vertical-wise revenue in FY22
Product VerticalRevenue in FY22
LED lighting, fans and switchesRs 333 crore
Small appliancesRs 255 crore
Fractional horsepower motorsRs 237 crore
Moulded and sheet metal parts and componentsRs 164 crore
Other EMS productsRs 31 crore
Medical diagnostic cartridgesRs 17 crore
In the financial year 2021-22, the company posted total revenue of Rs 1,093.75 crore, compared to Rs 862.38 crore in the previous year. Its net profit rose to Rs 39.15 crore against Rs 34.86 crore in the previous year.
FY20FY21FY22
Revenue (Rs crore)7868621,094
EBITDA Margin (%)7.687.3
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