The initial public offering (IPO) of Avalon Technologies opened for subscription on Monday, April 3. The electronics maker is selling its shares in the range of Rs 415-436 apiece during the bidding process, which concludes on April 6.
Avalon Technologies is looking to raise Rs 865 crore through IPO. The offer includes a sale of 7,339,450 fresh equity shares aggregating to Rs 320 crore. Existing shareholders and promoters will offload 1.25 crore shares worth Rs 545 crore through an offer for sale (OFS)
Avalon Technologies has fixed the lot size at 34 equity shares, which would cost Rs 14,824 to the investors. Retail investors can bid for a maximum of 13 lots or 442 equity shares. The anchor book will open on Friday, March 31, 2023
Avalon Technologies has reserved 75% of the shares for qualified institutional bidders, whereas 15% shares will be allocated to non-institutional investors (NIIs). Retail investors will get the remaining 10% of the shares
Avalon Technologies shares are commanding a grey market premium of Rs 30 on Tuesday, March 28. The shares of the company are expected to list on the leading stock exchanges BSE and NSE on April 18, 2023
"The IPO is valued lower than its peers. It intends to deleverage further which should further boost profitability and improve return ratios. Considering the healthy business prospects for the Indian EMS industry, the company’s high return ratios and similar margins relative to peers and valuation comfort," said Reliance Securities with a 'subscribe' rating to the issue.
“At a higher price band, Avalon is demanding an EV/TTM sales multiple of 3.1 times, which is at discount to the peer average of 6.3 times. Based on our FY24E forecasts, the demanded EV/Sales is around 2.3 times, which seems to be attractive for a company like Avalon, which is operating in the high-growth EMS space,” said Choice Broking, which has a subscribe tag on it.
"It has a limited number of clients and serves a specific segment where a change in customer preference might affect it adversely. The issue is fully priced at a P/E ratio of around 39 times, after considering all the factors, we will recommend subscribing to this issue for high-risk Investors for the long term," said Swastika Investmart.
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