Sirma SGS Tech IPO Opens today: Sirma SGS Technology (SSTL) IPO opens for subscription today, August 12, 2022. The public offer of Rs 840 crore will be available for subscription till August 18. Electronics manufacturing services firm Sirma said it has raised Rs 252 crore from anchor investors ahead of its initial share sale. , Nomura, Kubero India The fund, BNP Paribas Arbitrage, Aditya Birla Sun Life Insurance Company, ICICI Prudential Mutual Fund (MF), Tata MF, Edelweiss MF and IDFC MF are among the anchor investors.
Sirma SGS will be the first company to enter the primary market in two-and-a-half months. Earlier, the IPO of Ather Industries was open for public subscription during May 24-26.
Sirma SGS Tech IPO: Price Band
Sirma SGS technology The IPO with a price band of Rs 209-220 per share will be open for public subscription during August 12-18. At the upper end of the price band, the initial share sale is expected to fetch Rs 840 crore. The public issue of Sirma SGS includes fresh issue of shares worth Rs 766 crore and Offer (OFS) of up to 33.69 lakh equity shares by Veena Kumari Tandon.
Sirma SGS Tech IPO: Valuation
The issue price is P/BV of 2.66 at a NAV of Rs. 42.36 as of FY22. The debt to equity ratio of the company has increased from 0.82 in FY20 to 0.24 in FY22. According to RHP, Dixon Technologies P/E is trading at 110x (highest) and Amber Enterprises P/E is trading at 75x (lowest) and the industry average P/E is 93x. Shushil Finance said in its IPO note that therefore Sirma share price is reasonably priced at a P/E of ~45x.
Sirma SGS technology IPO: Lot Size
Investors who wish to subscribe can bid for a size of 68 shares and thereafter in multiples of 68 equity shares. Those planning to invest in the issue will have a minimum investment of Rs 14,960 per lot at the upper end of the price band and a maximum investment of Rs 1,94,480 as against 13 lots as they are allowed to invest up to Rs. 2 lakhs.
Sirma SGS Technology IPO: Financials
Sirma SGS Technology had good revenue even in the Covid-19 period. Sales are growing at a steady pace. Sirma for the year ended March 2022 on strong top line and operating performance reported 16.6 per cent YoY growth in proforma profit at Rs 76.46 crore.
Sirma SGS Technology IPO: Objectives
The company intends to utilize the funds raised for several purposes such as funding capital expenditure requirements for development of an R&D facility and expansion/establishment of manufacturing facilities. It will also use the proceeds to finance long-term working capital requirements and general corporate purposes.
Sirma SGS Technology IPO: Risks
Highlighting the major concerns, Choice Broking said that unfavorable government policies and regulations, delay in expansion of capacity, unfavorable sales mix, unfavorable foreign exchange movement, working capital intensive operations and competition are the major areas of concern.
Sirma SGS Technology IPO: GMP Today
According to market experts, the shares of Sirma SGS Technology Limited are trading at a premium of Rs 20 per equity share. On Thursday evening, Sirma SGS Technology IPO GMP was at Rs 10, which means the gray market premium of the upcoming stock has doubled in the last 24 hours.
Sirma SGS Technology IPO: Should You Subscribe?
Tagging a ‘buy with caution’, Choice Broking said, “The company reported positive cash flows from operations in FY15 and FY21. Negative operating cash flow in FY22 mainly due to higher operating assets.” Though the average operating cash flow during the period stood at Rs.60.1 crore Financial liabilities grew at a CAGR of 34.7%, however, from 0.3x in FY20 to FY22 due to higher equity base debt-to-equity ratio Improved by 0.2x in pre-issue average ROIC and RoE of 13.6 per cent and 15 per cent, respectively.
Geojit said: “Keeping in mind its good peer financial performance, strong focus on R&D, capacity expansion plans, positive industry outlook with government support through PLI schemes and a strategy of China plus MNCs, we provide a “subscribe” rating for this issue on a medium to long term basis.”
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