Elin Electronics IPO subscribed 37% on day 1 of bidding

New Delhi: The Rs 475-crore initial public offering (IPO) of Elin Electronics Limited (EEL) was subscribed 37% on the first day of bidding process. The company is selling its shares in the range of Rs 234-247 apiece between December 20-22, with a lot size of 60 equity shares.

The issue comprises a fresh portion of Rs 175 crore, with an offer for sale (OFS) of Rs 300 crore. According to the data from BSE, the investors made bids for 52,35,360 equity shares or only 37% compared to the 1,42,09,386 equity shares offered for the subscription by 5 pm on Tuesday, December 20.

The quota for retail bidders was booked 55%, whereas the allocation for non-institutional investors fetched 43% bids. The portion for qualified institutional bidders was subscribed only 1%.

Incorporated in 1969, Elin Electronics is a leading electronics manufacturing services provider. It manufactures and assembles a wide array of products and provides end-to-end product solutions.

The majority of the brokerage firms are majorly positive on the issue and have suggested subscribing to it citing strong financial, robust business model and attractive valuations.

EEL seems to be reasonably valued at an FY22 PE of 31.3x post-issue and 29.7x its FY23 annualized earnings as compared to Dixon Technologies & Amber Enterprises which are trading at P/E of 140.4x & 62.8x respectively, said Anand Rathi Research.

"As Elin’s Revenue/PAT is growing at a robust CAGR of 18%/19%, respectively with an even robust industry outlook coupled with consistent margins, we recommend 'subscribe for long term rating' to this IPO," it added in the IPO note.

50% of shares are reserved for qualified institutional buyers (QIBs), whereas 15% of shares are reserved for non-institutional investors (NIIs). The remaining 35% of shares will be allotted to retail investors.

At a higher price band, EEL is demanding an EV/S multiple of 1x, which is at discount to the peer average of 2.1x, said Choice Broking. "We believe the IPO is attractively priced."

Axis Capital and JM Financial Services are the book-running lead managers to the issue whereas KFin Technologies has been appointed as the registrar to the issue.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)