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SYRMA SGS Technology Ltd IPO

Business Overview
The Company is one of the leading ESDM (Electronics System Development and Maintenance) companies with a focus on technology-based solutions and ODM (Original design manufacturer) business. Unlike the traditional OEM (Original equipment manufacturer) or ODM business model, which only focuses on certain stages of the production process, the company’s business model starts from product concept design and focuses on every segment of the overall industry value chain. The company currently operates through 11 manufacturing facilities spread across four states. Along with this, the company has 3 dedicated R&D facilities, one in Germany and two in India.

  • Products /Services offered by the company
1) Printed circuit board assemblies – Printed circuit boards are used in nearly all electronic products(calculators) which are used to connect electronic components.
2) Radio frequency identification (RFID) products - Refers to a wireless system that is used to automatically identify and track objects on which the RFID tags are attached. RFID is widely used in the tracking of goods, contactless payments, access management, etc.
3) Electromagnetic and electromechanical parts.
4) Motherboards, USB and SSD drivers, DRAM modules (Dynamic random-access memory).
5) Company also offers product design, prototyping, product assembly, testing, supply, and logistics services.

  • Objects of the offer
1) Capex requirements for the development of the R&D facility and expansion.
2) Funding working capital requirements.

  • Financials and valuation
1) The company did a pre- IPO placement at a price of Rs. 290 per share and collected 110 crores from the market.
2) As per the FY22 earnings the company is asking a PE multiple of 50.69 which is lower as compared to pre-IPO placement price.
3) Dixon Technologies and Amber enterprises are their listed peers and currently both are trading at a PE of above 100. However, the comparison cannot be done on an apple-to-apple basis.
4) The revenue grew at a CAGR of almost 21 % from FY 2020 whereas the profit has seen a degrowth of ~8.62% from FY 20 due to an increase in raw material costs and other non-cash adjustments made in the financial statements.


  • IPO details and subscription status
1) The IPO started on 12th August and will end on 18th August 2022 with an issue size of 840 crores out of which 766 crores is a fresh issue and the balance is OFS. The lot size will be 68 shares and a retail investor can apply for a maximum of 13 lots. The price band offered by the company is Rs. 209-220 per share.
2) As per the industry outlook and financials of the company the IPO could have been priced at a lower price band.To know whether I will be applying for this IPO or not, don't forget to tune in to our youtube channel (CA Rachana Phadke Ranade) on 18th August 2022 at 10:30 am . As of releasing the blog, the IPO has been subscribed 0.37 times.