Avalon Technologies IPO Day 2- Retail investors bid 0

Avalon Technologies IPO Day 2: Retail investors bid 0.45 times, issue 9% subscribed; GMP falls

Avalon Technologies IPO opened for subscription on 3 April and the issue has been booked 0.09 times on day 2, with total bids of 10,77,052 shares. Qualified institutional buyers (QIBs) subscribed for none of their reserved portion. Retail investors bid 0.45 times of the shares reserved for RIIs. The NII portion garnered 5% bids so far as non-institutional investors have not demonstrated much interest in the issue so far. The IPO closes for subscription on Thursday, 6 April. 

Avalon Technologies’ Rs 865 crore IPO opened for subscription on Monday and the price band for the IPO has been fixed at Rs 415-436 a share. Avalon Technologies IPO comprises a fresh issue of equity shares as well as an offer-for-sale component. Ahead of the IPO, the issue was opened for anchor investors on 31 March, Friday and raised Rs 389.25 crore. Avalon Technologies shares were commanding a negative grey market premium (GMP) of Rs 10 today. The shares of the company are expected to list on the stock exchanges on 18 April 2023.

Avalon Technologies is a fully integrated Electronic Manufacturing Services (EMS) company with end-to-end capabilities in delivering box build solutions in India, with a focus on high value precision engineered products. They also provide a full stack product and solution suite, right from printed circuit board (PCB) design and assembly to the manufacture of complete electronic systems (Box Build) to global original equipment manufacturers (OEMs) located in the United States, China, Netherlands, and Japan. 

““The company largely generates its revenues from the United States (~63% of revenues), catering to the sunrise industries such as clean tech, power automation, mobility. The company has an order book of Rs 1190 crore as on November 2022 with a customer base of 80. Overall, EMS( Electronic Manufacturing Services) is expected to grow at a CAGR of 32% to reach Rs 4500 billion from the current Rs 1469 billion. Its debt to equity ratio seems to be above average of its industry peers. However, its unique offering and B2B model help Avalon with long term relationships with its diverse customers, ensuring incremental order book and steady margin. We recommend SUBSCRIBE for the long term,” said Canara Bank Securities.