Elin Electronics Limited, a leading electronics manufacturing services company, has filed Draft Red Herring Prospectus (DRHP) with the market regulator SEBI for an Initial Public Offering (IPO).
The Delhi-based company's IPO comprises equity shares of face value of Rs 5 each comprising a fresh issue aggregating up to Rs 175 crore, and an offer for sale of up to Rs 585 crore, according to it's draft red herring prospectus (DRHP).
The Offer for Sale comprises up to Rs 32.10 crore by Kamal Sethia, up to Rs 52.50 crore by Kishore Sethia, up to Rs 47.40 crore by Gaurav Sethia, up to Rs 13.20 crore by Sanjeev Sethia, up to Rs 12.50 crore by Sumit Sethia, up to Rs 57 crore by Suman Sethia, up to Rs 15.60 crore by Vasudha Sethia and up to Rs 9.1 crore by Vinay Kumar Sethia (The Promoter Selling Shareholders"), and up to Rs 345.60 crore by Other selling shareholders (The "Other Selling Shareholders").
At present, Individual Promoters Kamal Sethia, Kishore Sethia, Gaurav Sethia, Sanjeev Sethia, Sumit Sethia, Suman Sethia, Vasudha Sethia and Vinay Kumar Sethia combined holds 38.69% and Other selling shareholders owns 52.51% stake in the company.
Proceeds from the fresh issue will be used to the extent of Rs 80 crore to repay/prepay debt, Rs 48.97 crore for funding capital expenditure for upgrading and expansion of existing plants in Ghaziabad, Uttar Pradesh and Verna, Goa besides general corporate purposes.
Led by Kamal Sethia, Managing Director & Promoter along with Raj Karan Chhajer, its CEO, Elin offers Electronic Manufacturing Services, Universal Motors and Induction Motors, Design & Manufacturing of Tools/Moulds/Dies, Domestic Kitchen Appliances, Personal Care Products, Lighting Products & Automotive Components, resulting in a de risked business model.
The company stands different from the traditional EMS companies given its backward integrated product and solutions suite. Its focus is on component fabrication, sourcing and system assembly. Its key products in its EMS business vertical include LED lighting, fans and switches; small appliances; fractional horsepower and other EMS products.
EEL caters to both original equipment manufacturer ("OEM") and original design manufacturer ("ODM") business models and as per the F&S report stated in its DRHP, is one of the key players for LED lighting & Flashlights and Small Appliances with a market share of approximately 7% and 10.7% in FY21, respectively. The company partners with leading consumer electronics and appliances brands for LED lighting, fans and switches such as Signify Innovations and Eveready; for Small appliances such as Philips, Bosch, Faber, Panasonic and Usha; for fractional horsepower motors such as Havells, Bosch, Faber, Panasonic, Preethi (owned by Philips), Groupe SEB (Maharaja brand) and Usha; as well as for Medical diagnostic cartridges and for Moulded and sheet metal parts and components makers.
Its revenues from operations increased by 9.78 % from Rs 785.58 crore in fiscal 2020 to Rs 862.38 crore in fiscal 2021 primarily due to increase in consumer purchase of home and personal appliances aided by the relaxation of COVID-19 led restrictions., while its net profit jumped 26.81% to Rs 34.86 crore for fiscal 2021 from Rs 27.49 crore for fiscal 2020.
In 2017, a comparable peer Dixon Technologies, a consumer electronics and lighting product manufacturer for global and Indian brands, which got tremendous response from the all category of investors, was subscribed 118 times.
EMS globally, which was established only 5 decades ago has moved on from just assembling components on Printed Circuit Boards and Box Builds. Today brands are seeing more value as EMS companies are involved in product design and development, testing after sales services such as repair and remanufacturing, marketing and product lifecycle management. Currently China leads the global EMS market with almost 48% share.
Axis Capital Limited, and JM Financial Limited are the book running lead managers to the IPO.