Avalon Technologies IPO Day 1- Retail investors bid 0

Avalon Technologies IPO Day 1: Retail investors bid 0.16 times, issue 3% subscribed

Avalon Technologies IPO opened for subscription on 3 April and the issue has been booked 0.03 times on day 1, with total bids of 3,68,050 shares. Qualified institutional buyers (QIBs) subscribed for none of their reserved portion. Retail investors bid 0.16 times of the shares reserved for RIIs. The NII portion garnered 1% 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 9 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 is an integrated EMS provider with good diversification among end-user industries and clients with strategic manufacturing locations. Its scope of work requires complex designing, engineering, component procurement and manufacturing which creates long lead times and consequently entry barriers. It is also likely to benefit from the ‘Make in India’ and the PLI schemes of the Govt which promotes local manufacturing of components and electronics systems. The company intends to deleverage further which should further boost profitability and improve return ratios. Considering the healthy business prospects for the Indian EMS industry, company’s high return ratios and similar margins relative to peers and valuation comfort at 55.5x P/E on annualised FY23 financials, we recommend SUBSCRIBE to the issue,” said Reliance Securities.