Elin Electronics makes tepid start, lists at 2% discount

After KFin Technologies, Elin Electronics made a muted debut on the stock exchanges on Friday, in sync with the mood seen in the grey market, as the electronics manufacturing services provider received a lower-than-expected response for its initial public offering (IPO). The stock got listed at ₹243 on BSE, a discount of 1.62% to the issue price of ₹247. On the NSE, the stock opened 1.21% lower at ₹244 against the IPO price. Ahead of its listing, the stock was trading at around 2% discount from the issue price in the grey market.

Post listing, the stock slipped further and declined as much as 3.2% to hit a low of ₹235.25, while it touched a high of ₹244.75 on the BSE. Similarly, it hit a low and high of ₹235.35 and ₹245 on the NSE. On the volume front, a total of 34.6 lakh shares changed hands over the counter on the BSE and the NSE, while the market capitalisation stood at ₹1,160 crore.

On Thursday, technology-driven financial services platform KFin Technologies also made a quiet debut by listing at ₹367 against its issue price of ₹366 per share.

The weak market debut of KFin Technologies and Elin Electronics were in line with the D-Street estimate as volatility in the equity market and tepid response to their IPOs weighed on stocks performance.

Elin Electronics' ₹475 crore IPO was subscribed 3.09 times as it received bids for 4,39,67,400 shares against 1,42,09,386 shares on offer. The quota reserved for qualified institutional buyers (QIBs) was booked 4.51 times, while portions for high networth individuals (HNIs) and retail investors were subscribed 3.29 times and 2.2 times, respectively.

The company cut its IPO size to ₹475 crore from ₹760 crore filed with SEBI earlier. The issue comprises a fresh issue of ₹175 crore and an offer for sale of up to ₹300 crore. The three-day IPO of electronics manufacturing services (EMS) provider, which opened between December 20-22, had a price band of ₹234-₹247 per share and the lot size was 60 shares.

The company intends to use ₹88 crore raised from fresh issue of equity shares to repay debt while ₹37.59 crore will be utilised for capital expenditure to upgrade and expand facilities at Ghaziabad in Uttar Pradesh and Goa. As of September 2022, the company had net debt of ₹102.42 crore.

Formed in 1969, Elin Electronics is a leading electronics manufacturer of end-to-end product solutions for major brands of lighting, fans, and small/ kitchen appliances in India. It offers electronic manufacturing Services (EMS), including universal and induction motors, tools, moulds, dies and domestic kitchen appliances, personal care products, lighting products and automotive components. The key products in its EMS business vertical include LED lighting, fans and switches, small appliances, fractional horsepower and other EMS products.

For the financial year 2021-22 (FY22), the company reported net profit of ₹39.15 crore as against ₹34.86 crore in the previous fiscal. The revenue grew to ₹1,093.75 crore versus ₹862.38 crore a year ago.