Avalon Technologies IPO to open today. 10 key things to know

On April 3, Avalon Technologies, a top provider of fully integrated electronic manufacturing services (EMS), will begin its initial public offering (IPO).
Subscriptions for the public offer will be accepted through April 6th. The company has gathered about 389.25 crore from 24 anchor investors in preparation for the IPO. The company is expected to be listed on BSE and NSE following the IPO.

10 key points of Avalon Technologies IPO:

1. Avalon allotted 8,927,751 equity shares to 24 anchor investors and raised ₹ 389.25 ahead of the company’s proposed IPO, at the upper price band of ₹ 436 per equity share (including a premium of ₹ 434 per equity share) with a face value of ₹ 2 per share.
2. Among the anchor investors, some of the major names were Goldman Sachs Funds, HDFC Large and Midcap Fund, Franklin India Opportunities Fund, WhiteOak Capital funds, IIFL Select Series II, Mahindra Manulife funds, and Nomura India Stock Mother Fund.
3. Of the total allocation of equity shares to anchor investors — about 2,981,698 equity shares (i.e. 33.40% of the total allocation to Anchor Investors) were allocated to 5 domestic mutual funds through a total of 10 schemes.
4. The IPO for non-anchor investors which means qualified institutional buys (QIBs), non-institutional investors (NIIs), and retail individual investors (RII) will open from April 3rd to 6th.
5. The IPO comprised a fresh issue worth ₹320 crore and an offer for sale (OFS) aggregating to ₹865 crore.
6. The price band has been at a minimum of ₹415 per share and a maximum of ₹436 per share.
7.  Under the OFS, the selling shareholders of the company are — promoters Kunhamed Bicha, Bhaskar Srinivasan, T P Imbichammad, and Mariyam Bicha. Other shareholders are Anand Kumar, Sareday Seshu Kumar, and Luquman Veedu Ediyanam.
8.  Of the total 100% book building offer, 75% of the portion will be kept for QIBs, 15% reserved for NIIs, and 10% for RIIs.
9.  JM Financial Limited, DAM Capital Advisors Limited, IIFL Securities Limited, and Nomura Financial Advisory and Securities (India) Private Limited are the Book Running Lead Managers to the Offer. Link Intime India is the registrar of the issue.
10.  The company will not use the proceeds from OFS since they will go to selling shareholders. However, Avalon plans to use proceeds from fresh issue for repayment of all or a portion of certain outstanding borrowings of itself and one of its subsidiaries Avalon Technology and Services. Also, the company plans to use fresh capital proceeds for funding working capital requirements and general corporate purposes.

Avalon Technologies is one of the leading fully integrated Electronic Manufacturing Services (“EMS”) companies with end-to-end operations in delivering box-build solutions in India in terms of revenue, with a focus on high-value precision engineered products.

Avalon has seen a significant rise in its customer base to 81 in FY22 from 62 in FY21, increasing its order book to ₹11,902.46 million as of November 2022 from ₹9,182.32 million as of November 2021.

Its electronic manufacturing facilities comprise an aggregate of 66 production lines, consisting of 11 Surface Mount Technology (“SMT”) lines, 12 Through Hole Technology (“THT”) lines, and 43 assembly lines.