Syrma SGS Technology IPO opens today: Price band, GMP, lot size and more

The initial public offer (IPO) of Syrma SGS Technology opened today. The share sale of the electronics manufacturing services (EMS) firm will close on August 18. The grey market premium (GMP) of the IPO is Rs 15. The company is offering its shares in a price band of Rs 209 to Rs 220 per share. It plans to raise Rs 840 crore at the upper end of the price band through the share sale. The lot size of Syrma SGS Technology IPO is 68 shares for which one will have to spend Rs 14,960.

A retail individual investor can submit bids for up to 13 lots or 884 shares by spending Rs 1,94,480 . DAM Capital Advisors Ltd (Formerly IDFC Securities Ltd), ICICI Securities and IIFL Securities are the book running lead managers for the IPO of Syrma SGS Technology. The allotment of shares will be done on August 23 and they are likely to be listed on BSE and NSE on August 26.

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Link Intime India Private Ltd is the registrar to the IPO.

The IPO consists of a fresh issue of equity shares aggregating to Rs 766 crore and an offer for sale of up to 33,69,360 equity shares.

The firm raised Rs 252 crore from anchor investors ahead of its initial share sale on Thursday. The company will allocate a total of 114,56,261 equity shares to anchor investors at Rs 220 apiece, aggregating the transaction size to Rs 252.04 crore, according to a circular uploaded on BSE's website.

Nomura, Kuber India Fund, BNP Paribas Arbitrage, Aditya Birla Sun Life Insurance Company, ICICI Prudential Mutual Fund (MF), Tata MF, Edelweiss MF and IDFC MF are among the anchor investors, it added.

The net proceeds from the IPO will be utilised for funding capital expenditure requirements to expand manufacturing, R&D facilities, long-term working capital requirements and general corporate purposes. Half of the issue size has been reserved for qualified institutional buyers, 35 per cent for retail investors and the remaining 10 per cent for non-institutional investors.

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Here's a look at what brokerages said on the prospects of the IPO.  

Geojit has assigned a subscribe call to the IPO.

"At the upper price band of Rs 220, Syrma SGS Technology is available at a P/E of 50.7x (FY22), which is available at a discount to its peers. Considering its good peer financial performance, strong focus on R&D, capacity expansion plans, positive industry outlook with government support through PLI schemes and China plus one strategy of multinational companies, we assign a 'Subscribe' rating for the issue on a medium to long term basis," the brokerage said.

Swastika Investmart is positive on the prospects of the IPO.

Santosh Meena, Head of Research, Swastika Investmart said, "The firm is one of India's leading and fastest-growing electronics system design and manufacturing (ESDM) companies. With a huge focus on R&D-based innovation and an experienced management team, the company has managed to enter into various growing segments like PCBA, Radio Frequency Identification (RFID), Electromagnetic and electromechanical parts, and other information technology-related products, including motherboards, DRAM modules, SSD and USB drives. The company's business model starts from product concept design and focuses on every segment of the overall industry value chain; this gives them a competitive advantage over traditional OEM or ODM-based companies that focus on a single process or certain stages of production, thus creating lasting relationships with its marquee clients. Further, the geographically diversified manufacturing locations enable them to efficiently cater to the requirements of their customers in north and south India. Additionally, the business has had success using inorganic means to add new product lines and expand its geographic reach. The issue has been priced at a premium valuation, which is acceptable given its growth potential and competitive advantages. And therefore, we recommend investors to subscribe the issue."

Hem Securities is positive on the prospects of the IPO.

"The company is one of the leading design and electronic manufacturing services firm and has consistent track record of financial performance. It is diversified and continuously evolving and expanding product portfolio and service offerings catering to customers across various industries, backed by strong R&D capabilities. Also, the company has established relationships with marquee customers across various countries and state-of-the-art manufacturing capabilities supported by a global supplier network, with a focus on vertical integration. Hence, looking after all above, we recommend 'Subscribe' to the issue."