Sirma SGS IPO gets 37% subscription on first day

Retail investors flocked to Sirma SGS Technology’s initial public offering (IPO), the first share sale in the markets since May, with an overall membership boost of 37% on the first day of the IPO.

Scorching inflation and rising interest rates around the world prompted foreign investors to pull money out of emerging markets over the past few months, leading to a fall in stocks.

However, since July, Indian markets have seen a strong uptrend as foreign investors have become net buyers, allowing companies like Sirma to start selling their shares.

The retail investor portion of Sirma’s IPO was subscribed the highest among all categories at 69 per cent. Qualified institutional buyers have not placed their bids yet.

The reserve share of non-institutional investors witnessed a membership of 13%. The public issue will close on August 18.

Sirma is a provider of electronic design and manufacturing services to global and domestic original design and equipment manufacturers.

The company has priced its public offering in the range of 209-220 per share. The IPO consists of a fresh issue of equity shares, totaling 766 crore and Offer for Sale (OFS) of 3,369,360 equity shares.

Before its issue was opened, Sirma SGS raised 252 crore from leading investors such as Nomura, Eastspring Investments, Franklin Templeton, Tata Mutual Fund, ICICI Prudential Mutual Fund, IIFL, Kuber India, Abaqus and BNP Paribas as part of its so-called anchor book allocation. The company aims to raise 840 crore through its public offering.

Promoted and led by Sandeep Tandon and Jasbir Singh Gujral, Sirma is a technology-focused engineering and design company engaged in turnkey electronics manufacturing services (EMS) and specializes in precision manufacturing.

The company has witnessed a compound annual growth rate (CAGR) growth of 20% in its revenue between FY20 and FY22.

“Serma Hi-Mix is ​​a leader in low-volume electronics products, which find application in high growth sectors like Industrial Appliances, Automotive, Healthcare, Consumer Products, IT etc. In FY20-22, the average business contribution from the industrial sector was around 40%, while consumers, automotive and healthcare contributed 22%, 17% and 17%, respectively, to the total operating revenue. Such a wide range of product end-uses reduces a company’s dependence on a single sector and provides a natural hedge against market volatility,” brokerage company Choice Broking said in an August 11 report.

Investment banks Dam Capital Advisors Limited, ICICI Securities Limited and IIFL Securities Limited, Choice Broking are managing the share sale.

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