Avalon Technologies IPO Begins Today, Should You Invest?

Day 1 of the Avalon Technologies IPO: The initial public offering of electronic manufacturing services provider Avalon Technologies Ltd. is scheduled to begin today.

Electronic manufacturing services provider Avalon Technologies Ltd.’s initial public offering is scheduled to begin accepting subscriptions today and run through Thursday, April 6, 2023.

Prior to its initial share offering, the business announced on Friday that it had secured just over Rs 389 crore from anchor investors. A total of 89.27 lakh equity shares would be distributed by the business to 24 funds at a price of Rs 436 each.

Pricing range for the Avalon Technologies IPO

With a face value of Rs. 2 per share, the price range has been set at Rs. 415–436.

Avalon Technologies IPO: Size of the Public Problem

By its IPO, which consists of a new issuance of shares worth Rs 320 crore and an offer for sale (OFS) of equity shares by the promoters and other shareholders for Rs 545 crore, Avalon hopes to raise Rs 865 crore.

Equity shares of Rs 131 crore are being sold by Kunhamed Bicha, Rs 172 crore by Bhaskar Srinivasan, Rs 16 crore by T P Imbichammad, Rs 10 crore by Mariyam Bicha, and Rs 65 crore by Sareday Seshu Kumar are also included in the OFS. Moreover, Anand Kumar and Luquman Veedu Ediyanam plan to sell 75.5 crore rupees’ worth of shares apiece in the OFS.

Goals of the problem

The proceeds from the new issue will be used by the electronic manufacturing services (EMS) company for general corporate objectives as well as the repayment of debts (Rs 145 crore) and working capital needs (Rs 90 crore). The selling shareholders will receive the money raised through the OFS, not the business.

IPO: GMP for Avalon Technologies

Market watchers report that shares of Avalon Technologies are currently trading at a premium (GMP) of Rs 12 on the black market. On Tuesday, April 18, 2023, the company’s shares are anticipated to list on the top stock exchanges BSE and NSE.

“The company has an outstanding PAT margin compared to its industry rivals. Based on the FY22 numbers, Avalon Technologies’ IPO valuation is 45x PE post-fresh issuance, which is around average for the market. Given the uncertain state of the market at the moment, it would be interesting to see how the company is received “said UnlistedArena’s Abhay Doshi.

Avalon Technologies IPO: Business Information

Avalon Technologies, a fully integrated EMS company founded in Chennai in 1999, specializes in high-value, precision-engineered products and offers end-to-end box build solutions.

Its customers include international original equipment manufacturers (OEMs), including OEMs in the United States, China, Netherlands, and Japan. It offers a full-stack product and solution suite, right from printed circuit board (PCB) design and assembly to the production of complete electronic systems (box build).

Should You Subscribe to the Avalon Technologies IPO?

Any increase in raw material costs may adversely affect the business and financial performance. 

The company sources its raw materials from suppliers, primarily on a purchase order basis, who may not perform their contractual obligations in a timely manner or at all. 

The company is also dependent on a small number of customers for a significant portion of its revenues.

The electronics manufacturing industry is known for its volatility, and raw material costs may negatively affect the firm. 

Investors should carefully assess the company’s performance, financial health, and growth prospects before participating in the IPO “said UnlistedKarts founder, Krishna Raghavan.

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