Syrma SGS Technology List Tomorrow: Syrma SGS Technology, a Chennai-based technology-focused engineering and design company involved in turnkey electronics manufacturing services (EMS), was subscribed 32.61 times on the final day that closed last week. 840 crore-IPO received bids for 93,14,84,536 shares, of which 2,85,63,816 shares were held. Syrma SGS Technology’s offer includes a fresh issue of equity shares of up to Rs 766 crore and an offer for sale of up to 33.69 lakh equity shares by promoter Veena Kumari Tandon.
The company said the net proceeds from the new issue will be used to fund capital expenditure requirements for expansion of manufacturing, research and development facilities, long-term working capital requirements and general corporate objectives.
Shares of Syrma SGS Tech are commanding a premium (GMP) of Rs 48 in the gray market today, according to market watchers. Analysts suggested that maintaining the issue price below the pre-IPO placement price, strong financial performance, strong customer relationships, a diversified product range and experienced promoters could be the main reasons for the company’s premium in the gray market.
An informal trading platform is the gray market. Trading begins as soon as the price range of an IPO is released and continues until the shares are listed.
Manoj Dalmiya, Founder and Director-Proficient Equities, said: “Sirma gray market premium (GMP) of public issue in the gray market has increased from Rs 20 to Rs 55 per equity share. According to market watchers, Syrma SGS Technologies IPO GMP remained stable around Rs 55, despite a two-day sell-off in the market after the closure of the public issue. Now the IPO has moved from Rs 50 GMP to Rs 55 we expect the listing to be around Rs 260-270. Based on its financials and earnings, the issue is priced at a P/E of 50+ even at a lower IPO price.”
What do analysts say about listing profits?
Ravi Singhal, CEO, GCL, said: “The stock is looking good as it lists around Rs 320. Long-term investors stay invested while short-term traders can book full profits.”
Dalmia said: “The segment in which SSTL operates is also poised for bright prospects ahead and investors can consider it with a medium to long-term perspective.”
Abhay Doshi, founder, UnlistedArena.com, dealing in pre-IPO and unlisted shares, said: “D-Street will witness an IPO listing after a long gap. Syrma SGS received good response in all categories. Due to the reaction, Syrma SGS may list at a premium of 20-25 per cent over the issue price if market conditions are favorable.”
The company’s shares are expected to be listed on stock exchanges BSE and NSE on Friday, August 26, 2022.
Syrma SGS Technologies, incorporated in 2004, is a Chennai-based technology-focused engineering and design company engaged in turnkey electronics manufacturing services (EMS). Its customers include TVS Motor Company, AO Smith India Water Products, Robert Bosch Engineering and Business Solutions, Eureka Forbes and Total Power Europe BV.
It operates through eleven manufacturing facilities in Himachal Pradesh, Haryana, Uttar Pradesh, Tamil Nadu and Karnataka and has three R&D facilities located in Tamil Nadu, Haryana and Germany.
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