The initial public offering (IPO) of Avalon Technologies was subscribed 2.21 times on the final day of bidding process. The initial share sale received bids for 1,14,63,854 shares against 4,02,662 shares on offer by 5 pm on Thursday. The public issue began on April 3, 2023.
The quota meant for qualified institutional buyers (QIBs) was subscribed by whopping 3.57 times, while the portion for non-institutional investors received 41 per cent subscription and the retail individual investors (RIIs) category got 84 per cent subscription.
The issue came with a price band of Rs 415-436. Those who have applied had to spend Rs 14,824 (calculated at the upper price band) for a minimum investment of one lot, comprising 34 shares. The maximum lot size was 13 or 442 equity shares (Rs 1,92,712).
The IPO included a sale of up to 7,339,450 fresh equity shares aggregating to Rs 320 crore, while existing shareholders and promoters were offloading 12,500,000 equity shares amounting to Rs 545 crore through an offer for sale (OFS).
Grey market premium
Market participants said grey market premium (GMP) was last seen at around Rs 2.50. It implied that the company may list at a slightly higher premium of 0.57 per cent.
“Avalon has shown consistent revenue growth and a diversified revenue contribution. The IPO valuation, based on FY22 figures, stands at 45x PE post-fresh issue, putting it at par, almost, with other players in the market,” said Manan Doshi of UnlistedArena.com, dealing in unlisted & pre-IPO shares, told Business Today.
“The company operates a business with high entry barriers and has a global delivery footprint. The company has a strong order book. It has strong and stable financial performance with improving margins. However, its PAT margin for the first eight months of FY22 marked a decline, and it also has a high debt ratio currently,” said Swastika Investmart.
JM Financial, DAM Capital Advisors, IIFL Securities and Nomura Financial Advisory & Securities (India) were the book-running lead managers to the issue, whereas Link Intime India was appointed as the registrar. The stock would be listed at both BSE and NSE on April 18.
Avalon is an electronic manufacturing services’ (EMS) provider. It has 12 manufacturing units located across the US and India offering a variety of solutions and services to its clients.
Also Read | 200% jump in Q4 profit! This PSU from Nifty index looks set to log strong results ahead. Any guesses?
Also Read | Wipro, TCS, Infosys shares fall up to 38% in a year; more pain ahead?