After two months of drought, the IPO of Chennai-based engineering and design firm Syrma SGS Tech is expected to hit the public market on Friday 12th August. The public offering is open for bidding until August 18, 2022. Let’s have a look at Syrma SGS IPO review.
The company has already raised Rs 11 crores in 37.93 million shares before filing a prospectus for Red Herring through pre-IPO placement. The funding was offered at a price of INR 290 per share representing a 32% premium to the issue price of INR 220.
Syrma SGS Tech has fixed a price range of Rs 209 and Rs 220 per share. The issue includes a fresh sale of Rs 766 crore and an offer to sell 336,900 shares by existing shareholders. Investors can bid a lot size of 68 shares and he can bid in multiples thereof.
About the Syrma SGS Limited
Founded in 2004, Syrma SGS is a technology-oriented engineering and design company based in Chennai that provides turnkey electronic manufacturing (EMS) services and specializes in precision manufacturing. The company provides integrated services and solutions for original equipment manufacturers (OEMs), from the early stages of product design through mass production, joint concept generation, and product realization. They specialize in precision manufacturing for a variety of end-use industries including industrial equipment, automotive, healthcare, consumer products, and IT industries.
Their major clients include TVS Motor Company, AO Smith India Water Products, Robert Bosch Engineering, and Business Solution, Eureka Forbes, and Total Power Europe BV.
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Manufacturing
The company currently operates 11 manufacturing sites and 3 R&D facilities strategically located in Himachal Pradesh, Haryana, and Uttar Pradesh in northern India, and Tamil Nadu and Karnataka in southern India. The production facilities in Tamil Nadu are located in special economic zones and that in Haryana was established under the Electronic Hardware Technology Park program. This allows the company to enjoy tax and other benefits. Of the 3 R&D facilities, two are in Chennai and Gurgaon and one in Stuttgart, Germany.
Syrma SGS IPO: Product Portfolio
- Assembled Printed Circuit Boards (PCBA)
- RFID (Radio Frequency Identification) products.
- Electromagnetic and electromechanical parts
- Motherboard and memory Products – DRAM Modules, Solid State, and USB Drives.
Objects of the Syrma SGS IPO issue
The respective portion of the proceeds from the Offer for Sale (which is, proceeds from the offer for sale of 3,369,360 Equity Shares) shall be received by Veena Kumari Tandon (Selling Shareholder).
The Company proposes to use the net proceeds from the fresh issue to finance the following items:
- Funding the investment needs associated with the development of R&D facilities and expansion or new manufacturing facilities
- Financing long-term working capital needs.
- General corporate purpose.
Also Read List of Upcoming SME IPOs in India.
Basis of the Syrma SGS IPO Offer
• Consistent course record of financial performance.
• Diversification, continuous evolution, and expansion of product portfolio and service offerings to customers across multiple industries, supported by strong R&D capabilities.
• Established relationships with reputable clients from various countries.
• State-of-the-art manufacturing capabilities and support of a global supplier network.
• Experienced promoters supported by a proven senior management team
Syrma SGS IPO Details
Syrma SGS Technology Ltd has filed for an IPO with SEBI which comprises a fresh issue of 926 lakh shares. The Chennai-based engineering and design firm Syrma SGS Tech IPO is expected to hit the public market on Friday 12th August. The public offering is open for bidding until August 18, 2022. Syrma SGS Technology IPO price has been fixed in a range of Rs 209 and Rs 220 per share. The issue includes a fresh sale of Rs 766 crores and an offer to sell 336,900 shares by existing shareholders. Investors can bid lot size of 68 shares, and thereafter they can bid in multiples thereof.
Check the tables of Syrma SGS technology IPO details below for more knowledge.
| Syrma SGS IPO Date | Aug 12, 2022, to Aug 18, 2022 |
| Syrma IPO Face Value | ₹10 per share |
| Syrma SGS Technology Share Price | ₹209 to ₹220 per share |
| Syrma IPO Lot Size | 68 Shares |
| Issue Size | [.] shares of ₹10 (aggregating up to ₹840.00 Cr) |
| Fresh Issue | [.] shares of ₹10 (aggregating up to ₹766.00 Cr) |
| Offer for Sale | 3,369,360 shares of ₹10 (aggregating up to ₹ [.] Cr) |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE, NSE |
| Company Promoters | The promoters of the company are Sandeep Tandon, Jasbir Singh Gujral, Veena Kumari Tandon, and Tancom Electronics Private Limited. Promoters collectively hold 58.78% of the Equity Share as of Dec 31st, 2021. |
The Syrma IPO lot size is 68 shares. A retail-individual investor can apply for up to 13 lots (884 shares or ₹194,480).
| Application | Lots | Shares | Amount |
| Minimum | 1 | 68 | ₹14,960 |
| Maximum | 13 | 884 | ₹194,480 |
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Syrma SGS IPO Tentative Timetable
Syrma’s IPO will start on August 12, 2022, and close on August 18, 2022. The bidding will start at 10:00 AM on 12 August and close at 5:00 PM on 18 August. The deadline for confirmation of the UPI delegation is 12:00 PM.
| Event | Date |
| IPO Opening Date | Aug 12, 2022 |
| IPO Closing Date | Aug 18, 2022 |
| IPO Allotment Date | Aug 23, 2022 |
| Initiation of Refunds | Aug 24, 2022 |
| The credit of Shares to Demat | Aug 25, 2022 |
| IPO Listing Date | Aug 26, 2022 |
Syrma SGS IPO Strengths and Opportunities
- Leading design and electronic manufacturing services companies in terms of revenue in Fiscal 2021
- Low Company Debt
- Aims to strengthen its core competitiveness of technology innovations
- Pursue inorganic growth through strategic acquisitions
- Aims to expand its customer base and geographic reach
- Increase wallet share from existing customers
Risk Factors
- No long-term commitments with customers
- Declining Net Cash Flow
- Low Piotroski score: Companies with weak financials
Financial Trends Of Syrma SGS IPO
Syrma reported a 16.6% increase in pro forma profit for the year ended March 2022, surpassing the previous year’s Rs 7.646 crores on strong sales and operational performance.
- The company reports revenue of Rs 39.708 crore, Rs 43.830 crore, and Rs 64.626 crore for FY20, 21, and 22 respectively. The Company’s Revenue increased at a CAGR of 27.56%. This is an excellent number.
- In FY20, FY21, and FY22, Rs.332.09 crore, Rs.306.97 crore, and Rs.353.94 crore accounted for 83.63%, 70.04%, and 54.77% of export operating profit respectively.
- The company reported -EBITDA of Rs.69.90 crore, Rs.52.93 crore, and Rs.64.77 crore for FY20, FY21, and FY22 respectively, with EBITDA margins of 17.60%, 12.08%, and 10.02% respectively for the same period.
- Profits have declined over the past two years. Profits have decreased from his Rs 4.388 crore in 2020 to Rs. 3.061 crores in 2022. The Net profit reported in FY21 was the lowest at Rs 2.862 billion. Earnings decreased as margins declined.
- The profit margins for FY2020, FY21 and FY22 were 11.05%, 6.53%, and 4.74% respectively.
- The average EPS over the last three fiscal years is 5.18 and the average RoNW is 14.85%.
Summarized Balance Sheet
| Particulars | Mar’22 | Mar’21 | Mar’20 | ||
| Liabilities | 12 Months | 12 Months | 12 Months | ||
| Share Capital | 141.12 | .75 | .70 | ||
| Reserves & Surplus | 402.77 | 237.42 | 101.00 | ||
| Net Worth | 543.89 | 238.17 | 101.70 | ||
| Secured Loan | 132.59 | 56.12 | 83.80 | ||
| Unsecured Loan | .00 | .00 | .00 | ||
| TOTAL LIABILITIES | 676.48 | 294.29 | 185.51 | ||
| Assets | |||||
| Gross Block | 140.82 | 97.55 | 93.38 | ||
| (-) Acc. Depreciation | 26.82 | 16.18 | 6.90 | ||
| Net Block | 114.00 | 81.37 | 86.48 | ||
| Capital Work in Progress | 39.93 | .00 | .43 | ||
| Investments | 404.47 | 88.74 | .00 | ||
| Inventories | 114.79 | 77.08 | 68.22 | ||
| Sundry Debtors | 171.79 | 127.87 | 116.36 | ||
| Cash and Bank | 11.20 | 30.21 | 35.17 | ||
| Loans and Advances | 58.54 | 54.74 | 40.04 | ||
| Total Current Assets | 356.33 | 289.90 | 259.79 | ||
| Current Liabilities | 231.36 | 159.68 | 156.09 | ||
| Provisions | 6.89 | 6.04 | 5.10 | ||
| Total Current Liabilities | 238.24 | 165.72 | 161.19 | ||
| NET CURRENT ASSETS | 118.08 | 124.18 | 98.60 | ||
| Misc. Expenses | .00 | .00 | .00 | ||
| TOTAL ASSETS(A+B+C+D+E) | 676.48 | 294.29 | 185.51 |
Rs (in Crores)
Comparison with Peers
The company has two major listed competitors – Dixon Technologies Limited and Amber Enterprises India Limited.
Here’s how Syrma compares to the above-mentioned companies:
- Syrma’s total revenue is one-ninth that of Dixon Technologies and one-third that of Amber Enterprises.
- Syrma has the lowest earnings per share (EPS) at 5.25, and the other two EPS are in their thirties.
- The industry generally has a high PE ratio. Syrma has a PE of 50.69, Dixon has a PE of 110.76 and Amber has a PE of 75.54.
FAQs
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Syrma SGS IPO Promoters
- Sandeep Tandon
- Jasbir Singh Gujral
- Veena Kumari Tandon and
- Tancom Electronics Private Limited.
The promoters collectively hold 58.78% of the Equity Share as of Dec 31st, 2021.
Company’s Contact
Syrma SGS Technology Ltd
Plot B27, Phase II, Zone B,
MEPZ-SEZ, Sanatorium, Tambaram,
Chennai 600 045
Phone: 022 40363000
Email: compliance@syrmasgs.com
Website: https://syrmasgs.com/
Syrma SGS IPO Registrar
Phone: +91-22-4918 6270
Email: syrma.ipo@linkintime.co.in
Website: https://linkintime.co.in/
Syrma SGS IPO Lead Manager(s)
- DAM Capital Advisors Ltd (Formerly IDFC Securities Ltd) (Past IPO Performance)
- ICICI Securities Limited (Past IPO Performance)
- IIFL Securities Ltd (Past IPO Performance)
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