Avalon Technologies’ IPO subscribed 3% on the first day of issue

• The IPO received fairly decent demand from retail investors as 16% of the shares reserved for them were subscribed.
• The price band of the IPO is set at ₹415-436 per share.
• The shares of the company are currently commanding a grey market premium, or GMP, of ₹30 per share.

Only 3% of the initial public offering of Avalon Technologies was subscribed on the first day of the IPO, on Monday.

However, it did receive fairly decent demand from retail investors as 16% of the shares reserved for them were subscribed. Qualified institutional buyers (QIBs) however made no bids at all, for the IPO.

The IPO will close on April 6, 2023.

The offer is a combination of fresh issue worth ₹320 crore and an offer for sale (OFS) of ₹545 crore. The company has reduced the size of its IPO from ₹1,025 crore it had planned to raise earlier.

As per reports, the company cut its IPO size after it completed a pre-IPO placement – carried out between October 2022 and February 2023 – amounting to ₹160 crore.

The price band of the IPO is set at ₹415-436 per share.

The shares of the company are currently commanding a grey market premium, or GMP, of ₹30 per share. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.

The company intends to utilise funds raised via the IPO towards debt repayment, funding working capital requirements and general corporate purposes. The company’s total net debt rose to ₹283 crore in FY22 from ₹261 crore in the previous financial year.


Avalon is an end-to-end electronic manufacturing service solutions provider founded in 1999. Some of its key clients include Kyosan India, Zonar Systems Inc, Collins Aerospace, e-Infochips, The US Malabar Company, Meggitt (Securaplane Technologies Inc) and Systech Corporation.

It has 12 manufacturing units located across the US and India. The company says it can also benefit from the tailwinds of Aatmanirbhar Bharat and the production-linked incentive Scheme (PLI).

Analysts have recommended subscribing to the IPO on strong growth prospects in the Indian electronic manufacturing services (EMS) industry.

“Considering the healthy business prospects for the Indian electronic manufacturing services (EMS) industry, company’s high return ratios and similar margins relative to peers and valuation comfort at 55.5x P/E on annualised FY23 financials, we recommend ‘subscribe’ to the issue,” said analysts at Reliance Securities.

The company’s key competitors include Indian EMS providers such as Dixon Technologies (India), Amber Enterprises India, Elin Electronics, Syrma SGS Technology, Kaynes Technology India, VVDN Technologies and Bharat FIH Limited.

“Its unique offering and B2B model help Avalon with long-term relationships with its diverse customers, ensuring incremental order book and steady margin. We recommend ‘subscribe’ for the long term,” said a report by Canara Bank Securities.

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