Shares of electronics manufacturing services and solutions provider Cyient DLM had a blockbuster debut on the stock exchanges on Monday, with its scrip opening at ₹403, at a premium of 52% to the initial public offering (IPO) price of ₹265 on the National Stock Exchange (NSE). On the BSE, the shares listed 51.3% above the issue price at ₹401.
Post listing, Cyient DLM shares gained as much as 60% to hit a high of ₹425 on the NSE and ₹424.4 on the BSE. On the volume front, a total of over 1.36 crore shares changed hands on the two exchanges, while the market capitalisation climbed to ₹3,245 crore.
The strong listing of Cyient DLM was in line with market expectations as the stock was commanding a premium of around ₹135 apiece in the grey market, indicating at least a 50% listing premium for the company's shares.
The ₹592-crore IPO of Cyient DLM, a subsidiary of IT services firm Cyient, had also received a strong response from investors, thanks to its healthy fundamentals as well as strong order book and a client base. The issue, having a price band of ₹250-265 apiece, was booked over 67 times on the back of strong bidding by qualified institutional buyers (QIBs) and retail individual investors. The public issue was subscribed 90.4 times in the QIB category, 45 times in the NII segment, while the retail portion was booked 49 times. The quota reserved for employees, however, received a tepid response and was booked merely by 2.5 times.
The issue was completely a fresh issue of 2,23,39,623 equity shares, aggregating up to ₹592 crore. As per the offer document filed with SEBI, Cyient DLM has reserved up to 75% of the issue for qualified institutional buyers (QIBs), 15% for high net-worth individuals (HNIs), and 10% for retail investors. Investors can apply for a minimum of 56 equity shares and its multiples thereafter.
The company intends to use the capital raised from the IPO to fund incremental working capital requirements, capital expenditure, and repayment or prepayment, in part or full, of certain of the borrowings. A part of the fund will be also used to achieve inorganic growth through acquisitions and meet general corporate purposes.
Ahead of the IPO, Cyient DLM raised ₹259.64 crore by allocating 97,98,113 equity shares to 20 anchor investors, including eight domestic mutual funds through a total of 11 schemes. The anchor book saw participation from a wide variety of marquee investors, including Nippon Life India Small Cap, ICICI Prudential, HDFC MF, Tata Infrastructure Fund, Societe General, LIC MF, Amansa Holdings, DSP India, Aditya Birla Sun Life, Edelweiss MF, Founders Collective Fund, Catamaran EKAM, Vikasa India, BNP Paribas Arbitrage, and Kotak MF.
Established in 1993, Cyient DLM is an electronics and mechanical manufacturing partner and systems supplier to some of the largest players across multiple industries. The company provides customers with design-led manufacturing (DLM) solutions and has expertise in safety-critical electronics in highly regulated industries. The company generates the majority of its revenues from printed circuit board assembly (PCBA), which contributes around 63% to the revenue. It derives 32% of the revenue from box builds used in safety-critical systems such as cockpits, inflight systems, and medical diagnostic equipment.
On the financial front, the company has reported consistent growth in its top line in the last three financial years. For the financial year ended March 2023, the company posted revenue of ₹838.34 crore, ₹728.48 in FY22, and ₹636.91 crore in FY21. The profit after tax stood at ₹31.73 crore in FY23, compared with ₹39.80 crore in FY22, and ₹11.81 crore in FY21.
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