Syrma SGS Technology, one of the fastest growing Indian headquartered provider of electronic design and manufacturing services for global & domestic Original Design and equipment manufacturers (ODMs and OEMs), has filed its draft red herring prospectus (DRHP) with market regulator Sebi for initial public offering.
As per market sources, the company is looking at a fund raise between INR 1,000-1,200. The EMS company may also consider raising Rs 180 crore via a Pre IPO Placement before filing its red herring prospectus (RHP) and, if that happens, the issue size will be altered accordingly.
The Issue comprises a fresh issue of shares worth Rs 926 crore, and an offer for sale (OFS) up to 3,369,360 equity shares by Veena Kumari Tandon.
The net proceeds from fresh issue will be utilised for funding capital expenditure requirements to expand manufacturing & R&D facilities, funding long-term working capital requirements besides general corporate purposes.
Promoted and led by Sandeep Tandon and Jasbir Singh Gujral, Syrma SGS, is a technology-focussed engineering and design company engaged in turnkey electronics manufacturing services ("EMS") specialises in precision manufacturing.
From Manufacturing High Precision Coils for Hard Disk Drives and USB drives for the IT Industry; Set Top Box requirements for the Home Entertainment Industry; 4G and now 5G Modules for the Telecom Industry; Hall Sensor PCBAs, Vehicle Tracking Systems, Toll Management Systems, Beacons, 4W Lighting System Boards, EV Battery Management Systems for the Automotive End Use Industry; Automatic Dimmers, Induction Cooktop Components, Boiler Management PCBA units, Energy Efficient Electronic Inverters, Home Appliance Control PCBAs for the Consumer Products Industry; Direct Digital Dental X-ray FGPA Controllers, PCBAs for X-Ray Machines, Smart Canes for Visually Challenged People, Augmented Reality Equipment for Ophthalmological Applications addressing the requirements of the Healthcare Industry, the company caters to diverse industries and has come a long way since its incorporation in 2004. It stands to be one of the leading Printed Circuit Board Assembly manufactures in India and top global manufacturers of custom RFID tags.
Its marquee customers include TVS Motor Company Limited, A. O. Smith India Water Products Pvt. Ltd., Robert Bosch Engineering and Business Solution Pvt Ltd, Eureka Forbes Ltd Limited, CyanConnode Limited, Atomberg Technologies Private Limited, and Total Power Europe B.V. The companies aggregated wallet share from its top 10 and top 20 customers increased by CAGR of 31.88% and 34.38% respectively from FY19 to FY21.
It currently operates through eleven strategically located manufacturing facilities in north India (i.e. Himachal Pradesh, Haryana and Uttar Pradesh) and south India (i.e. Tamil Nadu and Karnataka) and three dedicated R&D facilities, two of which are located in India at Chennai, Tamil Nadu and Gurgaon, Haryana respectively, and one is located in Stuttgart, Germany.
Syrma's Proforma EBIDTA, considering SGS Tekniks and Perfect ID revenues has grown at a CAGR of 5.90% from Rs 101.92 crs in FY19 to Rs 116.80 crs in FY21. Between FY19 and FY21 its revenue from operations from the IT and other industry grew at 702.36% and 1119.96%.
In September 2021, Syrma Technology acquired Gurugram-based SGS Tekniks in a cash and stock deal, this added to its Manufacturing and R&D Capabilities and Supplier Network, giving them ample headroom for growth as there was little to no overlap of customers and geographies. Additionally, they acquired Perfect ID in October 2021, pursuant to which it acquired the infrastructure and know-how for the manufacture of RFID label tags and passive inlay tags, expanding our RFID products portfolio. It intends to continue its strategic expansion plans through inorganic growth opportunities.
Electronics is one of the fastest growing industries in the country. The total electronics market in India is pegged at $120 bn in FY21 and is expected to grow at a CAGR of 22.7% to reach $333 bn in FY26. The Domestic production of Electronics is around 56% of the total electronics market in FY21 and is expected to reach around 82% by FY26 with the help of government initiatives and development of electronic ecosystem in the country.
India is evolving as an innovation driven R&D destination for global companies. Recently another Indian origin EMS Company, Elin Electronics also filed with the regulator for a 760 cr IPO. It caters to major brands of lighting, fans, and small/ kitchen appliances, and is one of the largest fractional horsepower motors manufacturers in India.
Dam Capital Advisors Limited, ICICI Securities Limited, and IIFL Securities Limited are the book running lead managers to the issue.