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Business News/ Markets / Ipo/  Syrma SGS IPO gets subscribed 37% on first day

Retail investors flocked to the initial public offering (IPO) of Syrma SGS Technology, the first share sale to hit the markets since May, fuelling an overall 37% subscription on the first day of the IPO.

Scorching inflation and interest rate hikes worldwide prompted foreign investors to pull out money from emerging markets in the last few months, bringing down stocks.

However, since July, the Indian markets have seen a strong upward momentum as foreign investors turned net buyers, allowing companies such as Syrma to launch their share sales.

The Syrma IPO’s retail investor portion was subscribed the highest among all categories at 69%. Qualified institutional buyers are yet to put in their bids.

The reserved portion of non-institutional investors witnessed a subscription of 13%. The public issue will close on 18 August.

Syrma is a provider of electronic design and manufacturing services for global and domestic original design and equipment manufacturers.

The company has priced its public offering in the range of 209-220 per share. The IPO consists of a fresh issue of equity shares aggregating to 766 crore and an offer for sale (OFS) of up to 3,369,360 equity shares.

Ahead of its issue opening, Syrma SGS raised 252 crore from marquee investors such as Nomura, Eastspring Investments, Franklin Templeton, Tata Mutual Fund, ICICI Prudential Mutual fund, IIFL, Kuber India, Abakkus and BNP Paribas as part of its so-called anchor book allocation. The company aims to raise 840 crore through its public offering.

Promoted and led by Sandeep Tandon and Jasbir Singh Gujral, Syrma is a technology-focused engineering and design company engaged in turnkey electronics manufacturing services (EMS) and specializes in precision manufacturing.

The company has seen its revenues grow at a compound annual growth rate (CAGR) of 20% between FY20 and FY22.

“Syrma is a leader in high-mix low-volume electronics products, which finds application in high growth sectors such as Industrial appliances, automotive, healthcare, consumer products, IT etc. Over FY20-22, the average business contribution from the industrial sector was around 40%, while consumers, automotive and healthcare contributed 22%, 17% and 17%, respectively, to total operating revenue. Such wide product end-use reduces the company’s dependence on any one sector and provides a natural hedge against market instability," brokerage company Choice Broking said in an 11 August report.

Investment banks Dam Capital Advisors Ltd, ICICI Securities Ltd, and IIFL Securities Ltd, Choice Broking are managing the share sale.

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Swaraj Singh Dhanjal
" Based in Mumbai, Swaraj Singh Dhanjal is responsible for Mint’s corporate news coverage. For the past eight years he has been writing on the biggest deals in private equity, venture capital, IPO market and corporate mergers and acquisitions. An engineer and an MBA, he started his journalism career in 2014 with Mint. "
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Updated: 12 Aug 2022, 10:59 PM IST
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