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Syrma SGS Technologies GMP, Offer Details, Subscription; Last Day to Invest, Should you?

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Syrma SGS Technologies GMP, Offer Details, Subscription; Last Day to Invest, Should you?

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Syrma SGS Technologies IPO‘s four-day subscription is going to end today. The Syrma SGS Technology IPO, the first in nearly three months, opened on August 12 for the subscription. The Syrma SGS Technology IPO comprises of a fresh issue of shares aggregating to Rs 766 crore and an offer for sale of up to 3.37 million shares. Syrma SGS Technology raised Rs 252 crore from anchor investors last week ahead of its initial share sale.

Syrma SGS Technologies IPO: Subscription Status

According to stock market data, the issue received bids for 64.8 million shares against the 28.6 million shares on offer. The portion reserved for high net worth individuals was subscribed 3.58 times while the retail investors’ portion received bids for 2.66 times the shares set aside for them. The qualified institutional buyers’ portion was undersubscribed at 0.71 times.

Syrma SGS Technology IPO: Issue Size, Price Band

The electronics system design and manufacturing company, Syrma SGS Technology, aims to raise Rs 766 crore through the issue and Rs 74.12 crore via offer for sale at the upper price band. The price band for the offer has been fixed at Rs 209-220 a share.

Syrma SGS Technologies IPO: Financials

During FY20, FY21, and FY22, the company reported its revenues at Rs 2,804.3 Mn, Rs 1,931.3 Mn and Rs 2,521.2 Mn, out of which 70.0 per cent, 43.9 per cent and 39.0 per cent, respectively were attributable to its original design manufacturing services. The company has a comprehensive product portfolio with applications across diverse end-use industries. Its products primarily focus on ODMs and OEMs serving enduse industries, including the automotive, healthcare, IT, industrial appliances, energy management, water purification, power supply and consumer products industries.

The net proceeds from the fresh share issue will be utilised for funding capital expenditure requirements to expand manufacturing and R&D facilities and to fund long-term working capital requirements.

Syrma SGS Technologies IPO: Latest GMP

According to market observers, Syrma SGS Technologies IPO grey market premium (GMP) today is Rs 36, which is Rs 4 lower than its Wednesday’s grey market premium of Rs 40 per equity share. They said that Syrma SGS Technologies IPO GMP got more than doubled from Monday to Friday as it shot up from Rs 15 to Rs 40. So, such a dip in Syrma SGS Technologies IPO GMP today is negligible and it may recover on Thursday as it would be the last day available for bidder to apply for the IPO. They expected sharp upside in Syrma SGS Technologies IPO subscription status on the last date of bidding as market trend is still positive and it is mere 4 per cent away from its life-time high. However, stock market experts say investors should look at the balance sheet of the company as it would give a concrete picture of the company’s financials.

Should you Invest?

Speaking on Syrma SGS Technologies IPO, Abhay Doshi, Founder at UnlisteArena.com said, “Syrma is one of the leading Electronics system design and manufacturing (“ESDM”) company focused on exports. The company has a diverse customer base and product portfolio which evolves with changing needs and developments in technology. The company is also undertaking manufacture of modules for 5G technology infrastructure as well as controllers of EV battery management system amongst other products. The revenues have been growing steadily while the profit margins have shrinked, which seems to be a concern. Thus, it would be keen to watch how the company addresses shrinking margins ahead. The last Pre-IPO placement was undertaken at ₹290, however the issue still looks moderately to fully priced.”

Ventura Securities valued the IPO at FY22 P/E of 50.7X, which is lower than its peers Amber Enterprises at 69.9X and Dixon Technologies at 121.2X. “Considering the sector tailwinds and strong fundamentals of SYRMA, we recommend a SUBSCRIBE rating,” the brokerage firm said.

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