The Indian initial public offer (IPO) is going to be back in action after a long gap of two and half months, with Syrma SGS Technology launching its public issue later this week. The second half of 2022 has seen a sharp slowdown in IPO activities due to multiple factors, such as geopolitical tensions, macroeconomic headwinds, market volatility, price correction in overvalued stocks, and growing concerns about interest rate hikes and its impact on the economy. The weak performance of the latest debutants such as Life Insurance Corporation (LIC), Rainbow Children's Medicare, Prudent Corporate, AGS Transact, and Ethos also prompted several companies to defer their IPO plans.
Electronic manufacturing services firm Syrma SGS Technology is going to hit primary markets this week, with the issue opening for public subscription on August 12 while it will close on August 18, 2022. The Chennai-based company plans to raise around ₹840 crore through public issue, which comprises fresh issue of equity shares worth ₹766 crore, and an offer for sale (OFS) of up to 33.69 lakh equity shares. The price band for the offer has been fixed at ₹209 and ₹220 per share.
Ahead of the IPO, the engineering company has raised ₹110 crore through its pre-IPO placement of 37.93 lakh shares at a price of ₹290 per share, a 32% premium to the upper end of issue price of ₹220.
Key things to know about Syrma SGS Technology IPO:
Syrma SGS Technology is a technology-focussed engineering and design company engaged in turnkey electronics manufacturing services, specialising in precision manufacturing for diverse end-use industries. The company has eleven manufacturing facilities in India (i.e. Uttar Pradesh, Himachal Pradesh, Haryana, Tamil Nadu, and Karnataka). The homegrown engineering company has three R&D facilities, two of which are located at Chennai and Gurgaon and one in Stuttgart, Germany.
IPO date
The Syrma IPO will open on August 12 at 10.00 A.M. and will close on August 18 at 5.00 P.M. The anchor book will open for bid for a day on August 11.
Offer price
The company has fixed IPO price band at ₹209 to ₹220 per equity share.
Issue size
The IPO comprises a fresh issue of ₹766 crore and an offer for sale of 33.69 lakh equity shares. At the upper end of the price band, the total funds raise is estimated to be ₹840 crore.
Quota
Half of the issue is reserved for qualified institutional investors including anchor book, 35% for retail investors, and the remaining 15% for non-institutional investors.
Lot size
Investors can apply for a minimum of 68 equity shares and in multiples of 68 equity shares thereafter. At the upper end of the price band, the retail investors will have to invest a minimum of ₹14,960 per lot and a maximum of ₹1,94,480 for 13 lots. Retail investors are allowed to invest up to ₹2 lakh.
IPO objective
The company intends to utilise IPO proceeds from the fresh issue towards funding capital expenditure requirements for the development of an R&D facility and expansion of manufacturing facilities. A part of the fund will be also used for funding long-term working capital requirements, and general corporate purposes.
