Elin Electronics Ltd, an electronics manufacturing services provider, which filed the draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO) in November 2021, opens for subscription from tomorrow and closes on December 22.
The company has fixed the price band at 234 to 247 rupees per equity share. The public issue with a face value of 5 rupees per equity share comprises a fresh issue worth 175 crore rupees and an offer for sale of shares worth 300 crore rupees.
Axis Capital Limited, and JM Financial Limited are the book running lead manager to the issue.
Three brokerage houses are bullish about the public offer and have recommended 'Subscribe' rating.
Brokerage house, Canara Bank Securities Ltd in its report said that the company has been able to maintain its earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin in the range of 7-8%. The company has a long term relationship with its clients.
Despite the fact that the company's clientele is becoming less concentrated, despite its presence in a wide range of products, this issue still seems to be a concern.
"The promoter holding would reduce from 54% to 33% post issue. In comparison to its peers, the issue is available of relatively attractive valuation. We recommend 'Subscribe' for listing gains for the issue," said the brokerage house.
According to brokerage, HEM Securities Ltd, company’s consistent and strong track record of financial performance is making the issue attractive.
With diversified products and established market positions in key industry sectors, such as fractional horsepower motors, the company has a low-risk business model.
"Also, company’s entrenched relationships with a marquee customer base & high degree of backward integration resulting in higher efficiencies, enhanced quality of products and customer retention capability," said the brokerage in its report.
Further, Reliance Securities Ltd has recommended 'Subscribe' to the issue after taking into account the company's dual Original Equipment Manufacturer (OEM) and Original Design Manufacturer (ODM) based business model, diverse product and service portfolio, healthy financials, focus on research and development, and strong growth potential given the large addressable market.