Syrma SGS Technology, an electronics manufacturing firm, has come out with an IPO from 12th to 18th August!

Syrma SCS Technology IPO

IPO opens this week

Syrma SCS Technology, an electronics manufacturing firm, has come out with an IPO in the price band of Rs 209-220. The IPO opened on 12th August and will close on 18th August. The issue is expected to raise a sum of Rs 840 Crores. The offer constitutes Rs 766 crores of fresh issue, and the remaining is an offer for sale by the promoter Veena Kumari Tandon. This will be the first IPO in 2.5 months. 

After a lull in the markets, this electronic manufacturing firm has come out with an initial public offering. The company was incorporated in 2004, and it is based out of Chennai. It is an engineering and design company focused on electronics manufacturing. The company is in the manufacturing of RFID, PCBA, motherboards, electronic boards, etc. The promoters of the company are Jasbir Singh Gujral, Sandeep Tandon, Veena Kumari Tandon and Tancom Electronics Private Limited. The total promoter stake in the firm is around 58%. Only Veena Kumari Tandon is selling her stake through the offer for sale. 

RelatedHow IPOs differ from NFOs

IPO of Syrma SCS Technology Details

The firm came out with a pre-IPO placement at Rs 290 a few months back. Thus, the IPO upper band of Rs 220 is lower than the pre-IPO placement price. Even at the lower end of the price band, the PE of the firm is 50+, which is on the higher side. The company is operating in high-margin manufacturing, and the business prospects of the firm look good in the long term. As per the experts, investors can invest in the IPO with a medium to long-term view.

Some of the brokers and investment analysts which have an ‘Apply’ rating on the IPO are Canara Bank, Dilip Davda, Hem Securities, Investmentz Limited, KR Choksey Securities Limited, Reliance Securities, Sushil Finance Ltd, etc. Most brokers recommend investing in the IPO for the medium to long term, and the short-term returns might be affected by market volatility.

Related: All about IPOs in India

IPO reservation and subscription details

The IPO has a 35% reservation for the retail category. This means that 35% of the issue is reserved for investors investing Rs 2 Lakhs or less. The reservation for Qualified Institutional Buyers (QIB) is 50%, and the reservation for the HNI segment is 15%. As of 3 PM on 16.08.2022, the IPO is subscribed 0.84 times, and the retail quota is subscribed 1.45 times. This means that in the retail category, the IPO is already oversubscribed, and it is expected to be further subscribed.

Related: Different types of IPO investors

Syrma SGS Technology IPO Review | Apply or Avoid | By CA Prateek Dangi

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