2023 started off with continued stock market turbulence in India as a result of an uncertain global market scenario. Considering only 3 companies have come up with their IPOs since the start of 2023, the Indian IPO market seems sluggish and is likely to remain so in the near term. As investors await more IPOs to turn up at the stock market doorsteps for wider investment opportunities, Avalon Technologies Limited’s IPO seems like a glimmer of hope!
Avalon Technologies Limited IPO, an end-to-end Electronic Manufacturing Services (EMS) Company, was open for subscription from 3rd April 2023 to 6th April 2023.
After the Avalon Technologies Ltd IPO bidding closed, bidders and market observers have been eagerly waiting for the allotment date, which is today, 12th April 2023. However, grey market sentiments have not been very positive despite good secondary market trends. According to market observers, shares of Avalon Technologies Ltd are available at a premium of Rs. 10 per share, which is Rs. 15 lower from its weekend grey market premium (GMP).
Here are all the essential details of Avalon Technologies Limited IPO, including investment price band, allotment date, GMP, benefits, risks of investing in this IPO, and more.
Read More: Red flags to watch out while assessing a company
IPO Details
The key details of the Avalon Technologies Limited IPO are as under.
- IPO Size
The size of the IPO and different categories of the issue are:
| Category | Details |
| IPO Opening Date | 3rd April 2023 |
| IPO Closing Date | 6th April 2023 |
| Listing | NSE, BSE |
| Issue Type | Book Built Issue IPO |
| Face Value of shares | Rs. 2 per share |
| IPO Price Band | Rs. 415 – Rs. 436 per share |
| IPO Size | Rs. 865 crores (1,98,39,450 shares) |
| Offer For Sale | Rs. 545 crores (1,25,00,000 shares) |
| Fresh Issue | Rs. 320 crores (73,39,450 shares) |
- IPO Dates
The important dates for the Avalon Technologies Limited IPO are highlighted below:
| Event | Date |
| Opening date | 3rd April 2023 |
| Closing Date | 6th April 2023 |
| Allotment date | 12th April 2023 |
| Refund Date | 13th April 2023 |
| Share Credit Date | 17th April 2023 |
| Listing Date | 18th April 2023 |
- IPO Lot Sizes
Investors can subscribe to the shares of Avalon Technologies Limited IPO in pre-defined lots. The details of the lot sizes for this IPO are mentioned below:
| Category | Details |
| Investments in lots (for retail investors) | Minimum – 1 lotMaximum – 13 lots |
| Shares | Minimum – 34Maximum – 442 |
| Investment amount | Minimum – Rs. 14,824Maximum – Rs. 1,92,712 |
- IPO Reservation
The categories of eligible investors and their share in the IPO are tabled below:
| Category of Investor | Reservation Percentage |
| QIB (Qualified Institutional Buyers) | 75% |
| NII (Non-Institutional Bidders) | 15% |
| RII (Retail Individual Investors) | 10% |
Avalon Technologies Limited IPO Objectives
The key objectives of the IPO are stated below:
- The primary objective of the IPO is to utilise the proceeds towards prepayment or repayment in part or full of a few outstanding borrowings of the company and one of its material subsidiaries ATSPL
- Part of the IPO proceeds will also be used toward the working capital requirements of the company
- The balance proceeds will be used for general corporate purposes.
Top things to know about Avalon Technologies Limited IPO
Avalon Technologies was incorporated in 1999 and is a leading fully integrated Electronic Manufacturing Services (EMS) company offering end-to-end solutions. The company is in the business of providing end-to-end capabilities in delivering box-build solutions in India and focuses on high-value precision engineered products. The customers of the company include domestic and international companies including global OEMs in countries like Japan, China, the US, the Netherlands, and more.
Avalon has 12 manufacturing units in India and the US where it offers 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). Other services offered by Avalon include PCB design and assembly, cable assembly and wire harnesses, sheet metal fabrication and machining, magnetics, injection molded plastics, and end-to-end box build of electronic systems. Their customers are from diverse industries or sectors like the industrial, mobility, and medical devices sector, “sunrise” industries like solar power, electrical vehicles, and hydrogen in the clean energy sector, and digital infrastructure in the communications sector.
Financials of the company
Avalon Technologies Limited financials are given in the table below:
| Year | Total Assets (Rs. In crores) | Operating Revenue (Rs. In crores) | Profit after tax (Rs. In crores) | Basic EPS(Rs.) | Diluted EPS(Rs.) | RONW |
| Mar-2022 | 588 | 840 | 68.16 | 11.30 | 11.30 | 85.86% |
| Mar-2021 | 512 | 690 | 23.08 | 4.01 | 4.01 | 40.36% |
| Mar-2020 | 450 | 642 | 12.33 | 2.21 | 2.21 | 25.19% |
(Source: RHP)
Strengths of the company
Some of the key strengths of Avalon Technologies Limited that investors can take note of are:
| Category | Details |
| Business model | The company provides end-to-end integrated solutions and is a one-stop shop for all the electronic and electro-magnetic design and manufacturing services as well as delivering box build solutions. They also have a global delivery footprint equipped with high-quality standards and advanced manufacturing and assembly capabilities.The company is set to benefit from the Government initiatives like the Aatmanirbhar Bharat and the Production Linked Incentive Scheme |
| Customer base | They have a set of marquee customers and have long-standing established relations with them. |
| Competition | The company is in a high entry barrier business with collective cross-industry experience, and customer engagement capabilities. |
Risks of investment
Here are some of the risks that investors of Avalon Technologies Limited IPO should know:
| Category | Details |
| Business viability and profitability | Heavy dependency on their subsidiaries exposes the company to the risk of business survival or viability A significant portion of the revenue is concentrated or dependent on a few marque customers The company faces many business risks that may adversely affect its profitability like theForeign exchange fluctuation riskRisk of default in customer payments and receivables Fluctuations in price and availability of raw materials |
| Competition | The company functions in an industry that is quite fragmented and faces competition from many large and small players in the industry. |
What is the Grey Market Premium (GMP) of Avalon Technologies Limited IPO?
As of March 29th, 2023, the grey market premium for the shares of Avalon Technologies Limited is approximately Rs. 25 as per market observers.
Should you apply for Avalon Technologies Limited IPO?
Avalon Technologies is a huge name in the EMS business and has the ability to provide end-to-end solutions for diverse industries. Although the company has high debt levels, it also has sound EBITDA margins and PAT margins in comparison to its listed peers. The company also has a high RONW (Return on Net Worth) ratio and a sound business model. Therefore, investors can consider this IPO for listing gains or for a long-term investment portfolio.
How to apply for Avalon Technologies Limited IPO?
Investors can invest in this IPO through the Fisdom app.
Avalon Technologies Limited IPO FAQs
Avalon Technologies Limited caters to a diverse spectrum of sectors like the established and long product lifecycle industries, (industrial, mobility, and medical devices) and high growth “sunrise” industries (like the solar, electric vehicles and hydrogen in the clean energy sector), and digital infrastructure in the communications sector.
The manufacturing facilities of Avalon Technologies Limited are located across the United States and India. The company has one unit each in Atlanta, Georgia, and Fremont, California, while it has 7 units in Chennai, 1 unit in Kanchipuram in the state of Tamil Nadu, and 2 units in Bengaluru, Karnataka.
The GMP of Avalon Technologies Limited on 29th March 2023 was approximately Rs. 25 per share.
The shareholding pattern of Avalon Technologies Limited post-IPO will be 51.24% shareholding of the company held by promoters and the promoter group and the balance 48.76% to be held by the general public.
