Syrma SGS Tech shares list at premium on BSE, NSE; gain 19% from IPO price, tops Rs 260 on stock debut day

Syrma SGS Tech shares list at premium on BSE, NSE; gain 19% from IPO price, tops Rs 260 on stock debut day

Syrma SGS Technology shares listed on the stock exchanges today at a premium to the IPO price amid the positive market momentum. Shares of the company began trading on the NSE at Rs 260 per share, up 18.18% from the IPO price of Rs 209-220 apiece per share and on the BSE the stock debuted at Rs 262 apiece, rising 19.09 per cent. The Rs 840-crore IPO was subscribed by investors earlier this month and was fully subscribed by all categories. The company had a market capitalisation of Rs 4,617.20 crore on its market debut. This was the first company in over two months to hit the market with an IPO.

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The company has a large product portfolio, which includes printed circuit boards, RFIDS, electromagnetic, electromechanical parts and other products such as SSDs, USB flash drives, etc. The company currently operates through 11 strategically located manufacturing facilities in north India — Himachal Pradesh, Haryana and Uttar Pradesh — and south India — Tamil Nadu and Karnataka — and three R&D facilities, two of which are located in Chennai, Tamil Nadu and Gurgaon, Haryana, and one is located in Stuttgart, Germany. In September 2021, Syrma acquired Gurugram-based SGS Tekniks in a cash and stock deal. Additionally, it acquired Perfect ID in October 2021.

Analysts at ICICI Direct Research, in an IPO note, said that Syrma is one of the leading manufacturers in the fast growing domestic EMS industry. The company has a wide product portfolio with a diverse customer base. The company’s consolidated proforma revenue grew at 21% CAGR on-year driven by consolidation of new business and customer additions across product segments. The EBITDA margin declined 583 bps on-year to 9.9% due to change in product mix and raw material cost pressure. PAT came in at Rs 76 crore, lower than its FY20 PAT tracking lower margins. At the upper price band at Rs 220, the stock is priced at 50.7x at FY22EPS of Rs 3.2/share (based on fully diluted post issue of equity).