Avalon Technologies Limited IPO: What You Need to Know Before Investing

Avalon Technologies Limited IPO: What You Need to Know Before Investing

Avalon Technologies, an electronic manufacturing services company, will open its initial public offering (IPO) for public subscription on Monday, April 3, 2023. The public issue will last three days, closing on Thursday, April 6, 2023, with anchor investor bidding beginning on March 31, 2023. The IPO consists of a Rs 320 crore fresh equity share issuance and a Rs 545 crore Offer For Sale (OFS) of shares by promoters and current shareholders, totalling Rs 865 crore. This is lower than the initially planned Rs 1,025 crore through the share sale. The fresh issue proceeds will be allocated towards debt repayment, working capital needs, and general corporate purposes. Market analysts report that Avalon Technologies’ shares currently hold a Rs 22 premium (GMP) in the grey market. The company’s shares are anticipated to be listed on the major stock exchanges BSE and NSE on Tuesday, April 18, 2023.

Avalon Technologies’ Product Portfolio

Established in 1999, Avalon Technologies Limited is a prominent, fully integrated Electronic Manufacturing Services (EMS) company in India. The company specialises in delivering high-value, precision-engineered box-build solutions with end-to-end capabilities. In terms of revenue for Fiscal 2022, Avalon ranks as one of the top companies in its segment in India.

Avalon employs a distinctive global delivery model, providing a comprehensive product and solution suite, from printed circuit board (PCB) design and assembly to complete electronic system manufacturing (Box Build). The company serves various global original equipment manufacturers (OEMs) in countries such as China, the Netherlands, the United States, and Japan.

Avalon Technologies Limited’s offerings encompass PCB design and assembly, sheet metal fabrication and machining, cable assembly and wire harnesses, magnetics, injection moulded plastics, and end-to-end box build of electronic systems. As a result of their expertise in manufacturing and design support for crucial integrated assemblies, sub-assemblies, components, and enclosures across multiple industries, Avalon ensures that customers receive top-notch services.

The Objectives of Avalon Technologies’ IPO

The company intends to use the net proceeds for several purposes, such as prepaying or repaying all or part of specific outstanding borrowings obtained by the company and one of its significant subsidiaries, Avalon Technology and Services Private Limited (ATSPL). Additionally, the funds will be allocated for financing the company’s working capital requirements, ensuring adequate resources for ongoing operations and expansion plans. Lastly, the proceeds will also be directed towards general corporate purposes.

About the IPO

The IPO details for Avalon Technologies, an electronic manufacturing services firm, are as follows: The initial share sale of Rs 865 crore will open for public subscription on April 3 and close on April 6, with anchor investor bidding beginning on March 31, as stated in the red herring prospectus (RHP). The IPO comprises Rs 320 crore from fresh equity share issuance and Rs 545 crore through an Offer For Sale (OFS) by promoters and existing shareholders, initially aiming to raise Rs 1,025 crore.

The IPO size was reduced after Avalon completed a pre-IPO placement totalling Rs 160 crore, consisting of Rs 80 crore in primary or fresh issuance and Rs 80 crore in secondary share sales. The company raised Rs 60 crore each from UNIFI Financial Private Limited and Ashoka India Equity Investment Trust Plc and Rs 40 crore from India Acorn Fund Limited during the pre-IPO placement. As a result, the net public issue now stands at Rs 865 crore.

Funds from the fresh issue will be used for debt repayment, working capital requirements, and general corporate purposes. In January, Avalon received approval from the capital markets regulator, SEBI, to launch the IPO.

Established in 1999, Avalon provides end-to-end electronic manufacturing service solutions and has key clients such as Kyosan India, Zonar Systems Inc, Collins Aerospace, eInfochips, The US Malabar Company, Meggitt (Securaplane Technologies Inc), Systech Corporation. The company operates 12 manufacturing units across the US and India. As of fiscal 2022, Avalon’s revenue from operations was Rs 840 crore, and its order book was valued at Rs 1,039 crore as of June 30, 2022.

JM Financial, DAM Capital Advisors, IIFL Securities, and Nomura Financial Advisory and Securities (India) Private Limited serve as the merchant bankers for this IPO.

Financial Performance (In Crore)

 Important Dates for Avalon Technologies’  IPO

 Promoters of the Company

The company’s promoters are Kunhamed Bicha and Bhaskar Srinivasan.

How to Apply

Wait for the public issue to open for subscription, then click on “Apply Now” to apply for the Avalon Technology IPO with Bigul.