Cyient DLM raises ₹259.64 cr from anchor investors; IPO opens today

Electronic manufacturing services company Cyient DLM has raised ₹259.64 crores from anchor investors, ahead of its initial public offering (IPO) which will open for subscription today. As many as 20 anchor investors participated in the bid, including eight domestic mutual funds through a total of 11 schemes.

The company, a subsidiary of IT services firm Cyient, has allocated 97,98,113 equity shares to anchor investors at the upper end of the IPO band of ₹250-265 apiece. 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.

The three-day IPO of Cyient DLM will begin today and close on June 30 as the markets will observe a holiday on June 28. Shares of Cyient DLM are expected to be listed on domestic exchanges, BSE and NSE, on July 10.

The company has cut issue size to ₹592 crore, as against ₹740 crore earlier. It has undertaken a private placement of 4,075,471 equity shares at a price of ₹265 apiece, amounting to ₹108 crore.

The issue is completely a fresh issue of 2,23,39,623 equity shares, aggregating up to ₹592 crore. Investors can apply for a minimum of 56 equity shares and its multiples thereafter.

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.

The company intends to use the capital raised from the IPO for funding incremental working capital requirements, capital expenditure, as well as 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.

Axis Capital Limited and JM Financial Limited are the book-running lead managers (BRLMs) to the issue, while KFin Technologies has been appointed as the registrar to the issue.

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 design-led manufacturing (DLM) solutions to customers 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, which are 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.