Avalon Technologies IPO muted listing, debuts at par with issue price; falls 2% post listing

Avalon Technologies IPO muted listing, debuts at par with issue price; falls 2% post listing

Avalon Technologies shares listed at Rs 436 on the NSE amid a flat domestic market. The share debuted at the same price as its issue price. The scrip touched a low of 2% at Rs 423. A positive/flat listing was expected as ahead of the market debut, Avalon Technologies shares were trading at a premium of Rs 7 in the grey market.

Avalon Technologies IPO of Rs 865 crore opened for subscription on 3 April and the issue has been booked 234% on day 3. Qualified institutional buyers (QIBs) subscribed for 3.77 times of their reserved portion. Retail investors bid for 0.88times of the shares reserved for RIIs. The NII portion garnered 43% bids so far and is oversubscribed. 54.55% of the IPO is reserved for QIBs, while NIIs can bid for 27.44% and retail investors for the remaining 18.30%. The IPO closed for subscription on 5 April. Retail investors can apply for a minimum 34 shares in one lot, and a maximum of 13 lots with 442 shares, totalling to Rs 192,712. Following the issue, the promoters’ share in the company will be diluted from 70.75% to 51.24%.

“Avalon Technologies Ltd. made its debut in the market at a listing price of 436. The company’s issue price was Rs 415-436, so shares are listed at par with no profit and no loss. Avalon Technologies is a fully integrated EMS company with end-to-end operations that deliver box-build solutions in India. The company operates in a business with high entry barriers and has a global delivery footprint. Despite its strong and stable financial performance, Avalon Technologies experienced a decline in its PAT margin during the first eight months of FY22 and currently has a high debt ratio. Investors with a high-risk tolerance may consider holding Avalon Technologies Ltd. shares long-term, with a recommended stop loss of around 405, which is the lower price band of the issue,” said Pravesh Gour, Senior Technical Analyst, Swastika Investmart following the listing.